It's The Economy, Stupidhttp://davidwcampbell.com
David Campbell - A blog about economic development in Atlantic CanadaSat, 23 Sep 2017 14:18:24 +0000en-UShourly1http://wordpress.org/?v=4.2.16Cry havoc, and let slip the dogs of entrepreneurship!http://davidwcampbell.com/2017/09/cry-havoc-and-let-slip-the-dogs-of-entrepreneurship/
http://davidwcampbell.com/2017/09/cry-havoc-and-let-slip-the-dogs-of-entrepreneurship/#commentsSat, 23 Sep 2017 14:15:08 +0000http://davidwcampbell.com/?p=6934Continue reading →]]>I had a conversation recently with someone who thought we could learn from China as with think about economic development in Atlantic Canada. He was an admirer of all the state intervention, planning, the 20-year plans to be the world leader in shipbuilding, green energy, etc. etc. etc. When I look at China I have a different view.

My perspective is captured nicely in an Economist article this week (behind a paywall) that discusses in detail the massive rise in entrepreneurship in China over the past decade. There are more unicorns in China (startups worth $1B or more) than in the United States. Chinese entrepreneurs are disrupting almost every sector of the economy: transportation, finance, health care – they have leapfrogged North America in the development of data-driven health care solutions.

While we could debate that all day I think most people would agree that entrepreneurship is key – both inside established firms and the new start-up variety. And, I think there is a growing pile of data to suggest that New Brunswick in particular is not seeing that kind of ambitious, disruptive entrepreneurship. Don’t get me wrong, we have some examples – but I am talking about on a scale that moves the needle. And not just ‘tech’ startups – entrepreneurship and disruption should occur across a healthy and vibrant economy from construction to personal care shops.

Take employment growth in small firms as one proxy. Across Canada there has been healthy growth over the past decade in firms with less than 50 employees. In New Brunswick, employment in small firms is down. The spread between the national growth and the New Brunswick decline is substantial.

While this is not a perfect measure it is an important one. If the province had hundreds of new firms starting up over the past decade driving innovation, new technology and business process improvement, we would be seeing growth in the number of small firms and their employment.

Now, I realize some of you will correlate the decline in small business employment to the stagnant economy and population. That is true but I would argue it is getting increasingly hard to tease out causality here.

In the end I would like to see a new generation of entrepreneurs emerging in New Brunswick that want to shake up the status quo across all industries.

I’d like established firms to rediscover their entrepreneurial verve. Many have gone for years floating on comfortable margins, building up a little wealth and they have lost that lovin’ feeling. Do you remember what it was like to finish up a crisis planning meeting at 1:30 am?

The other thing about the Chinese is that they have global ambitions. Just about all the firms discussed in the Economist article are already buying up firms across North America and Europe. They might just be coming for you.

]]>http://davidwcampbell.com/2017/09/cry-havoc-and-let-slip-the-dogs-of-entrepreneurship/feed/0Think Big. It is time for a little more ambition across the Maritimeshttp://davidwcampbell.com/2017/09/think-big-it-is-time-for-a-little-more-ambition-across-the-maritimes/
http://davidwcampbell.com/2017/09/think-big-it-is-time-for-a-little-more-ambition-across-the-maritimes/#commentsMon, 18 Sep 2017 11:04:34 +0000http://davidwcampbell.com/?p=6926Continue reading →]]>You might have heard that Amazon is shopping around a 50,000 person head office to U.S. and Canadian jurisdictions with one million or more in population. It is easily the largest single firm economic development project shopped around like this in the past decade – maybe in my lifetime. Conservatively those 50,000 jobs will boost employment in other sectors by at least double that amount and one economist said it would boost state-wide employment by 5x. I’ve always been a little skeptical of those massive multipliers not least become some of the new growth will likely displace existing economic activity.

Anyway it got minds buzzing a bit even here in Atlantic Canada. I received multiple, and fairly serious, emails asking me if there was any possible chance? Nope. In fact, my suspicion, echoed in the Economist magazine this week, is that Amazon already knows where it wants to go and is using this whole city bidding war to boost the eventual incentives it will get in the city that it already knows it will be setting up in. But I can be cynical at times.

The whole ordeal prompted an overly excited columnist at the Times & Transcript to pen a surreal column about the entire Maritime Provinces putting in a joint bit to carve up the head office from Saint John to Lunenburg linked together by a high speed train moved along by pixies sprinkling their dust.

Pixie dust aside, I do believe a project like this – if phased in over 5-7 years could be easily done in a Halifax or maybe even a New Brunswick city as people will move to work in an Amazon head office. When RIM (remember RIM?) announced it would expanding in Halifax it asked employees in Ontario if any would like to relocate and as it was told to me they were inundated with requests. But no big firm is going to take a flyer on a small city and, BTW, no small city or province can stump up the billions of dollars that Amazon will receive to locate in Toronto or Atlanta.

But it does provide an opportunity to talk once again about ambition.

In the 1940s my grandmother told her sons they would have to leave the Miramichi if they wanted to be successful. In the early 1990s I was told there is no way any auto manufacturer would ever want to set up in New Brunswick even as they set up in droves in the most podunk off-the-beaten track places in the southern United States. Even the big firms that set up here got the usual “after the subsidies dry up they will be gone”. FYI – they are almost all still here – UPS, ExxonMobil, Air Canada, Fairmont – all the big firms that set up in the early to mid 1990s.

In fact, I have heard this refrain my whole career. Why would anyone want to move to New Brunswick? Why would an immigrant want to settle here? They will just get their PR and leave to find greener pastures. Why would a national or international firm set up here? There must be some backroom deal, some neutered labour laws – something or else they would not be here. Why would an ambitious entrepreneur set up here? They’d be better off just moving to San Jose or Waterloo.

Have a little ambition, folks. Flip the question. Why wouldn’t they want to locate here? Look at this place – 10 minute daily commutes, buy a big house and a cottage on the water here for what you pay for a small house in Toronto. Be able to pick up the phone and talk to a mayor or business leader – try that in Chicago.

Our negativity about ourselves is part of the problem – it is self-reinforcing. It’s like sharks smelling blood in the water. If you don’t even believe in your community why would anyone else?

]]>http://davidwcampbell.com/2017/09/think-big-it-is-time-for-a-little-more-ambition-across-the-maritimes/feed/0Pitchforks protecting Plutocrats? Don’t mess with the entrepreneurial risk premium.http://davidwcampbell.com/2017/09/pitchforks-protecting-plutocrats-dont-mess-with-the-entrepreneurial-risk-premium/
http://davidwcampbell.com/2017/09/pitchforks-protecting-plutocrats-dont-mess-with-the-entrepreneurial-risk-premium/#commentsSat, 16 Sep 2017 11:40:11 +0000http://davidwcampbell.com/?p=6919Continue reading →]]>I’m fascinated by how the proposed federal tax changes meant to “level the playing field” and “ensure that the richest 1% of Canadians pay their fair share of taxes” is playing out in the media and in the public at large.

I am not exaggerating when I say that 95% of all the articles and commentaries on Bill Morneau’s tax crusade have been negative – not just in the National Post – in every newspaper and media source I have tracked on this. And, further, all the comments on LinkedIn and Twitter have been overwhelmingly negative. Almost all the economists quoted have been against the changes and the few that were positive seemed to qualify their support – there has hardly been a full-throated supporter other than Morneau himself. Even the general public on my social media feeds – not business owners or wealthy people – are posting negative articles and commentary.

I’m actually not going to speak to the merits or not of these tax changes. I only have one small contribution to the debate.

Don’t mess with the entrepreneurial risk premium. We need public policy to ensure there are still lots of folks willing to plunge in and take the risk of becoming an entrepreneur.

As I understand it, Morneau wants to tax surplus income that is either left in professional corporations to avoid paying taxes or sprinkled around to family members who didn’t really earn it to lower the tax liability. The government uses the example of the doctor who accumulates hundreds of thousands of dollars – even several million – in the professional corporation without paying much tax on it (or sprinkles it around) and compares that doctor to another who just draws a salary from the local health authority. It’s ‘unfair’ that the latter will pay an effective tax rate substantially higher than the former.

The opponents to the tax changes say that potentially the vast majority of small businesses will get caught up in the new tax regime even those earning $70,000 per year. Further, they suggest it will be almost impossible to truly determine ‘active’ versus ‘passive’ income. Take the example of a small business owner who has accumulated $500,000 cash on her company balance sheet over a 10 year period. Is she hoarding that income to avoid paying taxes or saving up for a big expansion? How can you tell? What rules could you put in place to clearly differentiate between active and passive income?

As for income splitting, there should be some rules around this but again it would be hard to say that farmer Jane’s husband and kids were not ‘earning’ the money they were ‘sprinkled’.

Without being a tax expert – by any stretch – I suspect the vast majority of small businesses will not be impacted by the tax changes. Small amounts of sprinkling will likely be permissible and leaving profits in a small businesses for any kind of legitimate business reason – expansion, risk of a dry spell, etc. will be left alone. They keep using the example of that poor old doctor – a radiologist say – that makes $1 million and leaves $700,000 in his firm without paying tax.

I’ll make a quick point before coming back to my main theme. If a 20/20 rifle would suffice don’t use a bazooka. I’ve seen this a lot in government recently. They want to target a specific audience for some reason but make changes that impact everyone. If you want to address what you perceived to be a highly specific issue – don’t cast a wide net. If there is a very small cohort of people that are truly using corporate status in a way that you deem inappropriate – have that debate.

Don’t remove the entrepreneurial risk premium.

You want people that own small businesses to take entrepreneurial risk. In New Brunswick, there are something like 25,000 business establishments with employees. That is one business owner for every 30 people living in the province. There are thousands more that are owner-operators – electricians, plumbers, consultants, etc. that have no employees. These businesses are essential to the well functioning of an economy. They serve niches that big firms can’t or won’t. They keep big firms from bullying local markets by offering alternatives. The range of small businesses – niche retailers, restaurants, franchise holders, etc. is impressive and should be encouraged. Our economy is stronger and our quality of life is enhanced by having broad choices – choices made possible by all the small businesses.

Plus as I have pointed out elsewhere we need some of those small businesses to breakout and become large – serving national and international markets and generating export revenue. Somewhere in Canada there was a single Hakim Optical. Now Hakim has operations across Canada.

If an unintended consequence of these tax changes leads to fewer entrepreneurs – people deciding it is just easier to work for someone else, the economy and our society will be worse off for it.

As I have written about here many times New Brunswick does have a productivity challenge. We have to be a little careful we talk about productivity because different industries have different mixes of labour, capital and technology so comparing productivity measures in jurisdictions with fundamentally different industrial structures is not particularly valuable. For example, the oil and gas extraction sector generates $653 in labour productivity per hour while the accommodation and food services sector generates $18 per hour. Comparing an oil and gas-based economy to a tourism-based economy on productivity measures wouldn’t make sense. But comparing the tourism economy in various jurisdictions should help us understand which jurisdictions are more productive because it is more apples to apples – at least MacIntosh to Cortland and not avocados to blueberries.

With that caveat in place, New Brunswick still has a productivity challenge. As shown in the following table across a wide variety of industries there are big gaps – across all business sectors (again beware!) the gap is over 27 percent between New Brunswick and Canada. BTW there are a few where we have a productivity advantage – such as accounting services – which should be a hint that we may be able to offer these services nationally…..

There are many theories about the productivity gap. Some say it’s because we don’t have enough larger firms with the scale to drive productivity. Some say it’s because we historically had access to a lot of cheap labour so we drove a labour-intensive economic development model (governments still mostly support firms that create more jobs). Some say its because many of our industries were shielded from competition because they serviced small, local niche markets and were not exposed to global competition. Some say our business owners systemically haven’t invested enough in cpaital and technology. Whatever the reason (s), the problem exists and as we become even more exposed to global competition (think Amazon, Fiverr and other gig economy platforms) we will need to become more productive as a province.

So what do we do about this productivity challenge? I would propose we take what I call the Merv and Cook show on the road. Merv, of course, is Merv Symes representing Sympicity Designs which is an NB-based firm that is great at helping companies redesign their strategy and processes to drive better outcomes. Cook, of course, is Eric Cook, head of RPC – the largest R&D support organization in New Brunswick by a wide margin.

If you need a system and process redesign, Merv will put you on the rack and stretch until you get it done. If you need an engineered or science-based solution to your productivity challenge, Eric’s team will tinker until a solution is found.

So what we need then is for every small to medium-sized firm (and many large too) to take advantage of the Merv and Cook show. The ones that do mostly achieve significant productivity gains. But as with all things in New Brunswick we have a scale problem. Instead of dozens of firms deliberately moving on productivity – we need hundreds – even thousands to do so.

Disclaimer: Merv and Cook is actually not a thing (that I know of). They are two separate entities developing their own businesses. I just like the combo because they come at the same problems from substantially different angles.

]]>http://davidwcampbell.com/2017/09/have-you-seen-the-merv-and-cook-show-an-idea-to-boost-our-productivity/feed/0Are we a hustling, striving place or a great place to slow down and relax? Depends on who you ask.http://davidwcampbell.com/2017/09/are-we-a-hustling-striving-place-or-a-great-place-to-slow-down-and-relax-depends-on-who-you-ask/
http://davidwcampbell.com/2017/09/are-we-a-hustling-striving-place-or-a-great-place-to-slow-down-and-relax-depends-on-who-you-ask/#commentsWed, 06 Sep 2017 11:25:25 +0000http://davidwcampbell.com/?p=6908Continue reading →]]>Almost 25 years ago I took my first post-MBA job in New Brunswick. It was with the NB Department of Economic Development and Tourism (EDT) or maybe it was the NB Department of Economic Development, Tourism and Culture (?). Anyway, I was hired for a 2-3 months’ temporary position and I hustled it into 3.5 years and ultimately a good start to my career.

One of the most memorable moments of that period was a presentation made by then EDT DM Francis McGuire. He called the whole staff into a big room somewhere and put up a slide deck with his vision for the department. I don’t remember most of what he said that day but I do remember him stating emphatically “I never want to hear the %$X&#! term ‘Picture Province’ mentioned by this department or this government ever again!” (colourful language bleeped out but if you know Francis use your imagination).

His point was that GNB under McKenna was trying to re-position New Brunswick as a dynamic place with thriving urban centres and bustling rural communities. The vision was of a striving New Brunswick – carving out its economic role within Canada and around the world. If you come to New Brunswick you work hard and play hard. This was directly meant to counter specific data from polling that suggested New Brunswickers were perceived by the rest of Canada as kind of comfortable, lazy and laid back.

Of course old habits die hard. 25 years after McGuire’s emphatic pronouncement, here is a tourism billboard.

I know what you are going to say. This is a tourism message. That New Brunswick has great, uncrowded beaches. It’s an ideal place to come and lay on the beach. But if your economic development brand is one promoting hard working, bustling urban centres – the tourism message kind of counters this brand.

How about this billboard (pulled from Google). Again, a powerful tourism message that New Brunswick is a great place to relax and put up your feet.

I’ve never really postured as an expert in marketing. In fact, I probably stink in this black art but I would suggest there must be a way to align the messages. Maybe people mountain biking with a strained look on their face or shots of our urban downtowns bustling with people or a shot of a beach with lots of folks (not too many!) or even a shot of water with actual boats on it.

If we want to portray New Brunswick as an empty place with nothing going on but lots of opportunity to lay around on the beach – this may end up being a self-fulfilling prophecy.

]]>http://davidwcampbell.com/2017/09/are-we-a-hustling-striving-place-or-a-great-place-to-slow-down-and-relax-depends-on-who-you-ask/feed/0Fighting the biggest battle of our time with one hand tied behind our backhttp://davidwcampbell.com/2017/09/fighting-the-biggest-battle-of-our-time-with-one-hand-tied-behind-our-backs/
http://davidwcampbell.com/2017/09/fighting-the-biggest-battle-of-our-time-with-one-hand-tied-behind-our-backs/#commentsFri, 01 Sep 2017 11:01:27 +0000http://davidwcampbell.com/?p=6901Continue reading →]]>New Brunswick’s three larger urban centres (Fredericton, Moncton and Saint John) are trying to do something that is rare in recent Canadian history – dramatically increase immigration. Historically, most immigrants have flowed into the largest urban centres – without substantial spikes. For example, the Toronto area is still the top destination for immigrants but it has never seen a 3 or 4 times increase in a short period of time.

If you look at the average immigrant flow (from Statistics Canada’s components of population growth tables) into the Moncton CMA it is up by nearly 500 percent in just a decade (I used five year increments to smooth out the effect of Syrian immigrants in the most recent year). Saint John’s immigrant flow is up by over 160 per cent. This is unprecedented. It is also fundamental if we are to see New Brunswick’s labour market growing again and if we would like to see a sustained return to economic growth.

I believe this is the most important challenge of our time. If New Brunswick is to grow it will need to become far more multicultural – in a condensed period of time – far more quickly than places like Toronto and Vancouver which had a more paced move towards their now highly multicultural societies.

We can’t do this with one hand tied behind our back. Of course we will see outward migration of some of these immigrants. That is natural – look at Winnipeg as an example. Don’t criticize the types of immigrants coming here. Just look at the data for Canada’s large urban centres – immigrants flowed into industries that needed them. Don’t use the fact that some New Brunswickers use EI as an annual income supplement to hurt those industries that need workers to grow. Instead of restricting the flow of federal dollars in support of immigrants – those funds should be dramatically expanded.

How can we ensure such an expedited integration of immigrants without a massive effort? We need stronger ethnocultural community associations. We need churches to step up as they do in Manitoba and be catalysts for retention. We need our public institutions – hospitals, schools – to embrace the challenge of immigration. Giddy up, folks.

I have argued on these pages that we are living in inconsequential times. There haven’t been many big battles to fight. It’s been all about incrementalism. Now we have one. A big one. A whopper. It’s fundamental to our future. If we want to be a growing, thriving and dynamic economy – we will need to become far more multicultural. I challenge anyone to prove – with data – how New Brunswick will be able to sustainably fund its public services over the next 10-20 years without a significant rise in its younger population and workforce – without a massive increase in transfers from the federal government.

This is the big battle of our time. We need all hands on deck – especially the federal government.

]]>http://davidwcampbell.com/2017/09/fighting-the-biggest-battle-of-our-time-with-one-hand-tied-behind-our-backs/feed/3Stop your obsession with youth out-migration, pleasehttp://davidwcampbell.com/2017/09/stop-your-obsession-with-youth-out-migration-please/
http://davidwcampbell.com/2017/09/stop-your-obsession-with-youth-out-migration-please/#commentsFri, 01 Sep 2017 10:29:33 +0000http://davidwcampbell.com/?p=6896Continue reading →]]>There was a good article in the Globe & Mail recently outlining New Brunswick’s demographic challenges and how that is dampening the economic potential of the province. It certainly wasn’t a positive article – but it wasn’t the typical hatchet job either. It’s behind the paywall so I can’t link it here.

It was written by a former NBer. In my experience, there are two kinds of former NBers – those that are bitter and want to crap on their former province and those that still have an affinity to their former home and a nuanced view of things. Unfortunately some of the former have found their way into senior federal government roles, but I digress.

Unfortunately the writer continues to lament the woeful out-migration of New Brunswick’s youth and he continues to make this the main plot line for New Brunswick’s economic challenges.

In fact, it is the main plot line but for the exact opposite reason.

There are many reasons why young New Brunswickers leave – the main one being for economic opportunity. This is not controversial – most people agree on this point. But like most things in life you have to avoid the superficial explanation and dig a little deeper. We encourage our young people to go to university – a good thing – but the fact remains that the economy is creating a lot of jobs that do not require a university degree. Do we expect these young university educated workers to stay for jobs that don’t require a university degree?

Someone told me recently they went to UdeM engineering and 53 of the 55 people that graduated with them left the province. Do I think we should eliminate UdeM engineering? Absolutely not. In fact I think we should do a looooot more to position this talent pool as an asset to attract engineering firms or to support local engineering firm expansion. Many of these young Francophone engineers would be happy to stay in New Brunswick and work.

But I don’t think that engineer will go work in a back office or a warehouse or a manufacturing assembly line.

The facts are simple. People are more mobile than ever before. We are attracting more immigrants and more of them are showing up in the interprovincial migration data. Again, what do you expect? Immigrants don’t have roots here – very little connective tissue to the local community. Of course many will leave. The great Toronto loses an average of 23,000 per year on a net basis to intra- and inter-provincial migration. There isn’t a lot of hand wringing about the lost youth population in Toronto. They just go out and bring in 75,000 more every year. When Manitoba and PEI massively boosted immigrant numbers a few years ago – their net interprovincial migration spiked – as you would expect it to. But they kept more than they lost – and their economies benefited from it.

Canada is a place where it is not hard to find hypocrisy. I hear at some some federal bureaucrats are lamenting the fact that a lot of the jobs under the Atlantic Immigration Pilot are in service industries and other lower wage sectors. They would have preferred a lot more higher end jobs.

The flexibility to fill gaps in the labour market – across the spectrum – was the MAIN point of the Atlantic Immigration Pilot. Tens of thousands of immigrants flow into Ontario every year into lower skilled jobs – even a peek at the data confirms this – more than 60% of manufacturing workers are first generation immigrants, more than 50% of contact centre workers – something like 50% of overall service industry workers in Toronto are first generation immigrants.

The point is that there are many pathways into Canada – family class, refugee, student, etc. and New Brunswick has been restricted to the pathways that are targeted at high skilled immigrants. The AIP was meant to fix that and fill gaps in the labour market – sending a signal that employers can find workers here and foster expansions and growth.

I’m not going to litigate all the other issues here. I’m tired of it. Yes there are lots of people using EI. Yes there are people that prefer to not work rather than work the jobs on offer. Yadda. Yadda. Yadda. Guess what, there are exactly the same kinds of folks in Ontario and everywhere in Canada – just a little higher proportion here. Please don’t hold the rest of the economy hostage because of this. It’s patently unfair to hobble New Brunswick just as it wants to get serious about economic growth.

Don’t obsess with youth out-migration. Many leave and come back and are better for the experience. Those that don’t come back – fine. They are building their careers and lives in a great country.

If we use this as an excuse to hold back immigration – we are dooming New Brunswick to a downward demographic spiral.

]]>http://davidwcampbell.com/2017/09/stop-your-obsession-with-youth-out-migration-please/feed/1Embrace your inner snowwoman/snowmanhttp://davidwcampbell.com/2017/08/embrace-your-inner-snowwomansnowman/
http://davidwcampbell.com/2017/08/embrace-your-inner-snowwomansnowman/#commentsWed, 30 Aug 2017 12:07:59 +0000http://davidwcampbell.com/?p=6890Continue reading →]]>Lately I have been watching promotional videos for a few small urban centres in Canada. They are mostly well produced and make the communities look pristine, friendly and mostly charming. In others, at first glance a good place to live – which is kind of the point.

But all of them left out snow.

One showed a brief clip of a hockey team but no outdoor shots of snow, skating, skiing, sliding, snowshoeing, hiking – nothing. Normally when I visit a community in Canada (and the US) I buy a book on that community and, again, in most cases snow and winter barely make an appearance. I have a 100+ page book of photographs from Minnesota and not a single one in winter.

Twenty years ago it wasn’t that big a deal. Everyone was very familiar with winter – whether or not it showed up in promotional materials. But now we are trying to attract migrants from mostly warm climates and we need to be clear with them that we have 5 months of snow and fairly cold winters.

In fact, we should embrace and promote winter as an advantage. I’ve always found it strange that we don’t have more companies offering to rent skates, snowshoes, toboggans, cross-country skis, etc. Normally a city rec. department might do some of this but for the most part we just assume that Canadians have all the gear they want. If they reach 20 years old and don’t own skates they are probably not candidates to be out skating. But this is not the case with migrants. They come here with none of the winter gear – we should encourage them to try it out. We should host snowwoman making contests, offer free seminars on learning to skate, put on clinics regarding how to stay warm when playing outside.

We should promote winter tourism opportunities – ice fishing, winter bonfires in the woods, etc. Everyone should be encouraged to get out there and enjoy.

I have a lot of immigrant friends. Some love winter. Some endure winter. This, BTW, is the same as my born-in-Canada friends.

This matters. If New Brunswick is to grow it will need to attract and retain thousands of new immigrants each year as we move forward. There is a lot we can do to improve retention and one of those things is not to pretend winter doesn’t exist or to suggest people should just do their best to make it through. That’s not good enough.

]]>http://davidwcampbell.com/2017/08/embrace-your-inner-snowwomansnowman/feed/0What do we really want from free (r) trade? Back to first principleshttp://davidwcampbell.com/2017/08/what-do-we-really-want-from-free-r-trade-a-re-examination/
http://davidwcampbell.com/2017/08/what-do-we-really-want-from-free-r-trade-a-re-examination/#commentsThu, 24 Aug 2017 10:36:42 +0000http://davidwcampbell.com/?p=6884Continue reading →]]>As we start the renegotiation of NAFTA, there is lots of chatter in the media about the importance of trade, how critical it is to the Canadian economy, how it boosts GDP by x and makes us more productive, yadda, yadda, yadda.

It’s important to go back to the start and ask ourselves what we are trying to accomplish with free (r) trade. And, by the way, close cousins – free movement of people, free flow of capital, and free flow of ideas – may be even more important now.

Why trade at all? Why not build self-contained economies and have all goods and services produced within the hermetically sealed bubble?

I think Jared Diamond provides some core reasoning as to why trade matters. Diamond is best known for the Pulitzer prize winning Guns, Germs, and Steel, but I prefer Collapse if you want a good chronological view of how economies/states evolved over time. Certainly trade is not the focus of either book but you get a good overview as a bonus.

The bottom line is that trade is supposed to be mutually beneficial. While the benefit may be a bit lopsided there would be no reason to pursue free (r) trade if one jurisdiction benefited and the other hurt. Diamond talks about the earliest recorded examples of trade – inland tribes that were good at making arrowheads and other instruments from stone trading with coastal tribes that were good at harvesting fish. The benefited from the expertise of each other and both were better off.

Many economists tend to have a fairly stern view of the impacts of trade. Yes, it will cause economic upheaval in specific industries and geographies within the country but overall it will be better for the whole.

But in free, democratic jurisdictions, pure economic efficiency can get grounded on the shoals of practical reality. If enough communities and industries are hurt by trade (even if that is offset by winners), you can get Trump and this mood of anti-free trade.

Of course, the cold blooded economist looking at spreadsheets and crunching data will say that countries need to encourage broad intra-jurisdictional migration, retraining rather than income subsidization and more of a ‘tough love’ to the transitional period. They (many) argue that the same ruthless efficiency brought to industries by free trade should be applied to the labour market.

But that again ignores some fundamental issues. Lots of people like where they live. They don’t want to move. It’s hard to retrain people – you can’t just snap your fingers. And there is that little thing called democracy. If the people revolt against trade…..

There hasn’t been much backlash about free trade in Atlantic Canada. People are told on a regular basis that we are highly dependent on exports – fish, wood, agriculture, oil – and that has more or less sunk in.

For me, I think the starting point for the concept of free (r) trade in democratic societies has to be mutual benefit – quid-pro-quo. I’ve written about this on many occasions. There is good research (see Gladwell) that people will actually accept a worse outcome for themselves if they perceive the other party is getting a greater benefit. If someone is offering to give you and I $100 but you get to decide how to divide the money and I get to decide whether or not the deal gets done – the research shows you have to get pretty close to 50/50 to get acceptance. In some pure, spreadsheet economic theory I should take $1 because it is better than $0 – but I find it egregiously unfair that I would get only $1 while you get $99 even though I am better off by $1. So I will kibosh the whole thing because you are getting a better deal than me.

I will hurt my economic fortunes because I perceive you are getting a ‘better deal’.

Human nature and democratic politics will not be usurped by economists.

]]>http://davidwcampbell.com/2017/08/what-do-we-really-want-from-free-r-trade-a-re-examination/feed/0Economic development: All about the money, honey?http://davidwcampbell.com/2017/08/economic-development-all-about-the-money-honey/
http://davidwcampbell.com/2017/08/economic-development-all-about-the-money-honey/#commentsMon, 21 Aug 2017 01:45:34 +0000http://davidwcampbell.com/?p=6879Continue reading →]]>This is a recurring theme on this blog but I feel it is timely to raise it again. Specifically I am talking about the role of government in support of economic development.

I’ve seen multiple people on LinkedIn peddling new federal government programs to promote cleantech development, help companies export, etc. They are all under the umbrella of the Atlantic Growth Strategy.

Is the Atlantic Growth Strategy a growth strategy or is it a relatively small pile of cash doled out to firms by earnest bureaucrats?

This is a fundamental strategic issue for Atlantic Canada. If the government’s goal is getting the regional economy back to a sustained level of growth, that may or may not entail more direct cash handouts to firms. A true regional growth strategy would identify the causes of economic stagnation – low levels of inward migration, increased global competition, lack of new, high growth potential entrepreneurs, lack of multinational investment, etc. and then put some serious thought to what role can (or should) government play to influence positive economic growth?

It all seems to boil down to the cash. It’s easier that way. For government it is easy to set up a $20 million fund, build program rules around its distribution, dole out the cash and monitor the results. It is hard – sometimes really hard – to positively impact economic growth.

As I have said before, I am not opposed to direct cash transfers – where there is a demonstrated competitive need and a strong ROI but if governments are looking at how they can influence economic growth in a positive way the thinking has to go way beyond cash to firms. Best case scenario the cash has a slightly positive impact. Worst case it is just tax dollars crowding out private sector dollars – as many firms have told me government cash can be had at much better terms compared to banks or investors – so why not take the government cash?

Think about New Brunswick. The economy is roughly $30 billion (real GDP). If you want to see a 3% growth rate you will need the real GDP to grow by $900 million per year. You won’t get this done by making a few zero interest loans to cleantech firms or giving up to $15,000 for a small business to start exporting.

ACOA has approximately 600 staff in Atlantic Canada. The various provincial agencies (ONB, NSBI, etc.) have roughly 500 staff (conservative estimate) – roll up all local economic development agencies, CBDCs, allied organizations such as NRC, NBIF, Innovacorp, etc. and you get easily another 300-400 staff. So we have roughly 1,400 – 1,500 people in Atlantic Canada paid by government to do economic development (somewhere around $100 million just in payroll and benefits). There is about one economic development person for every 50 firms around Atl. Canada. There is one economic development person for every 1.5 exporting firms (international exports).

With all this horsepower we should be able to move a little bit beyond doling out cash.

]]>http://davidwcampbell.com/2017/08/economic-development-all-about-the-money-honey/feed/0Looking for Bootstraps: The Musicalhttp://davidwcampbell.com/2017/08/looking-for-bootstraps-the-musical/
http://davidwcampbell.com/2017/08/looking-for-bootstraps-the-musical/#commentsSun, 20 Aug 2017 10:35:16 +0000http://davidwcampbell.com/?p=6875Continue reading →]]>In my view, Donald Savoie’s Looking for Bootstraps should be required reading in the Maritimes. As a follow up to Visiting Grandchildren, he has added new content and important new thoughts on the issue of economic development in the three Maritime Provinces.

One of the challenges, however; is the format. Although Savoie deliberately writes for a broader audience, it’s certainly not written for the average Grade 8 student.

My 16 year old daughter is taken by the musical Hamilton. She knows it backwards and forwards. She has the music, a book about it and has done a ton of research. In fact, she knows about as much about Alexander Hamilton’s life as the average U.S. presidential historian – how he lived, his role in the revolution, how many federalist papers he wrote and what he focused on, his feud with Burr (and untimely death by duel), etc. She was rattling off these facts one day recently and I asked her how much she knew about Sir John A. or Wilfrid Laurier or the Fathers of Confederation?

Not much, she said, but if they would write a musical, she would nail it. And then she went on to lecture me about pedagogy and how the current approach to teaching is mis-aligned with how students best learn circa 2017.

Fair enough.

But my thoughts turned back to the old sage of economic development.

How about “Looking for Bootstraps: The Musical”?

As usual here, I put this forward only partially in jest. If we found ways to broaden the appeal of the content we could reach broader groups and better explain the history and sources of the region’s economic challenges and get people better motivated about the solutions.

For example, I think Savoie’s book should be given to every high school student in the province and should be discussed and debated in class. If the best way to get this done would be to distill the content down to infographics and 140 character tweets, then so be it.

The truth is that New Brunswickers – and Maritimers – have been inured to the economic reality here. Most just believe the standard view that this region is economically depressed and there isn’t much to do about it. If you can’t find work here – you go down the road. After 20+ years of studying this, I can tell you most people are resigned to the fact and not particularly concerned about it.

Savoie’s story would explain how we got here and provide pathways to improve our lot. But we have to find ways to broaden the base. All of the usual suspects – like me – have read his book – just like the many others he has written on related subjects. And we haven’t made much difference. Maybe we should broaden the base.

]]>http://davidwcampbell.com/2017/08/looking-for-bootstraps-the-musical/feed/0When does something rise to the level of ‘controversial’?http://davidwcampbell.com/2017/08/when-does-something-rise-to-the-level-of-controversial/
http://davidwcampbell.com/2017/08/when-does-something-rise-to-the-level-of-controversial/#commentsMon, 14 Aug 2017 21:11:50 +0000http://davidwcampbell.com/?p=6869Continue reading →]]>I was surprised to read this CBC article describing the Sisson Mine as ‘controversial’. I’m not sure it is particularly controversial. It has gone through a thorough environmental process and received both federal and provincial approvals. A while ago the CBC sent a journalist out to the Stanley area to ask local residents what they thought and it was mostly positive.

There are mining projects just like this in almost every province. Manitoba generates $2.8 billion worth of GDP from mining. Quebec $4.7 billion. BC $10.7 billion. New Brunswick? We’re down to $270 million worth of GDP from mining and that includes quarrying.

What makes something rise to the level of controversial? Anne Murray fought against wind turbines in Nova Scotia. Were they controversial? Long time residents of San Francisco are fighting the evil Google and its distortion of housing prices and general disruption of SF culture. Is Google controversial? A UdeM professor once authored a documentary that was deeply critical of contact centres – are they controversial?

You know where I am going with this. A lot of people trust the CBC. They rely on it for their news. Many New Brunswickers that would likely see the importance of Sisson Mine – most people realize that the products they consume are filled with mined natural resources and understand that Canada is a country with vast mineral resources – but if the CBC is now saying it is ‘controversial’ they may start to think there is something more risky about this specific mining project – compared to the hundreds of mines across the country. And when they read about the one massive mining disaster in BC – and not the hundreds that have been developed with a very limited environmental footprint – they may start to change their minds.

I personally don’t think the Sisson mine is particularly controversial. There are some folks opposed – that is natural in a democracy. If these projects go through rigorous provincial and federal environmental reviews and pass I’m not sure the media should describe them as controversial.

In reality, New Brunswick could use the economic boost. We used to get close to a billion dollars worth of GDP from mining (when Bathurst was going full steam, and later when potash was booming) and now it is down to a piddly $268 million. The 10 provinces combined generate $168 billion worth of provincial GDP from mining and NB gets about two-tenths of one per cent of that GDP. A little more would be welcome.

]]>http://davidwcampbell.com/2017/08/when-does-something-rise-to-the-level-of-controversial/feed/0The rise of Glamping. What can we learn from Mongolia about tourism investment?http://davidwcampbell.com/2017/08/the-rise-of-glamping-what-can-we-learn-from-mongolia-about-tourism-investment/
http://davidwcampbell.com/2017/08/the-rise-of-glamping-what-can-we-learn-from-mongolia-about-tourism-investment/#commentsSun, 13 Aug 2017 01:45:52 +0000http://davidwcampbell.com/?p=6866Continue reading →]]>There is an interesting article in the Economist this week about the rise of ‘glamping’ in China. This glamorous camping is done by rich Chinese. The yurts have “beds, windows, Wi-Fi and en suite bathrooms.” And this “A single campsite in Hubei can accommodate 8,000 people. Many offer entertainment too. The Swan Lake tourists enjoy Mongolian banquets and dancing in a giant concrete yurt.”

I have thought for a long time that if New Brunswick – and the Maritimes – want to seriously boost tourism – we have to be far more focused on tourism investment. As I have written many times before 98% of our effort is on how we get more tourists here and not on how we attract really nifty new tourism investments that will attract tourists here.

This may be an accident of history in New Brunswick but we have never really put any focus on trying to attract tourism investment or entrepreneurship. There have been a few less than successful efforts like putting government money into “cottage clusters” in the 1990s. But that is not what I am talking about. In fact, I’m not talking about government incentives at all.

I’m talking about a deliberate process of identifying potential new tourism investments that might work at the local level all around the region and then promoting those potential opportunities to tourism entrepreneurs. If you don’t like the idea of ‘government’ doing that work, fine – give industry the mandate – or consultants – or, I don’t know go ask the Mongolians – it seems to be working for the yurts.

Instead of putting all the focus on trying to boost tourist numbers we should put a focus on boosting tourism investors. Then we’ll have the product that will boost the tourism numbers.

]]>http://davidwcampbell.com/2017/08/the-rise-of-glamping-what-can-we-learn-from-mongolia-about-tourism-investment/feed/1Foxconn, incentives and ROI: Reduxhttp://davidwcampbell.com/2017/08/foxconn-incentives-and-roi-redux/
http://davidwcampbell.com/2017/08/foxconn-incentives-and-roi-redux/#commentsSun, 13 Aug 2017 01:34:39 +0000http://davidwcampbell.com/?p=6863Continue reading →]]>I recently wrote about the big Foxconn expansion in Wisconsin and the $3 billion incentive package. I wondered about the ROI on that level of incentives. It wasn’t clear to me if the project would achieve any real ROI over time – based on the economic impact numbers published by the Wisconsin government.

Then I read this. It’s an interview on the project from what appears to be a respectable economic development consulting firm. Here’s the point that bugs me. It’s made by a consultant: “Three billion of anything is a lot. But again, as with everything when you dig deeper and look at the economic upside of jobs and investment you can see why Wisconsin or quite frankly any state would come to the table so aggressively. You know, I guess one of the things I try and do is remove all the zeros and think about it in simple terms and you know this is simplifying it perhaps too much but Wisconsin is getting $10 and their giving back $3.”

Nope. That is not correct. The only ROI measure that works for government investment into economic development is incremental tax dollars. Comparing the $10 billion investment to the $3 billion in tax incentives is like a company comparing revenues and profits – they are related but separate concepts.

This Reuters article makes the point. Based on the scenario outlined, the article says the state might not break even on the $3 billion for 25 years in terms of incremental state taxes.

Economic developers cannot miss this fundamental point. The only ROI that matters is “for every tax dollar we pay out, how many incremental tax dollars will be generated?”.

The public purpose of economic development is not jobs or investment or new plants. It is to drive economic activity to ensure there is enough tax revenue to pay for good quality public services and public infrastructure. That’s it. If a government dips into the tax coffers and spend $1 million to attract a firm and the tax revenue from that firm over 10 years is $5 million – that means for every $1 in you get $5 out- that is an ROI.

Although, as an aside, there are other public ‘costs’ to having that company in your state. It will have trucks beating up the roads, it’s employees will have kids in schools and they may use public health care – you get the point. In the example above, the calculus is really: $1 million worth of incentives + $2 million worth of public ‘cost’ over the ten years – to generate $5 million in incremental taxes for a real ROI of 0.66 – for every dollar we put in, we generated an incremental $0.66 in tax revenue above the cost of the incentives and the public costs associated directly with the project.

I’m all for attracting big plants. I think it will help put Wisconsin on the map and may yield benefits not yet quantified. But if we move to a world where we don’t care about taxes-based ROI – I think we are heading into dangerous territory. I remember when the big auto manufacturing plants were getting $200 million and $300 million back in the 1990s there was outrage- but there was a clearly definable tax-based ROI over 10-15 years. Auto has a huge supply chain which helps.

And as for economic development experts and consultants, they are not doing the public any favors by spreading this nonsense about “Wisconsin is getting $10 and their giving back $3.”

]]>http://davidwcampbell.com/2017/08/foxconn-incentives-and-roi-redux/feed/1The monthly labour force survey: Putting little Jonny to workhttp://davidwcampbell.com/2017/08/the-monthly-labour-force-survey-putting-little-jonny-to-work/
http://davidwcampbell.com/2017/08/the-monthly-labour-force-survey-putting-little-jonny-to-work/#commentsSun, 06 Aug 2017 18:25:12 +0000http://davidwcampbell.com/?p=6854Continue reading →]]>The journalist Jacques Poitras likes to do his little “Where is this place” on Twitter. Because originality is challenging these days, I’ll borrow his game with a twist. I’ll ask – when is this? To be specific what was happening in May 2003 that would make this chart so significant?

Did you guess it? Without Googling? When the May 2003 labour force survey data was published it was right in the middle of the 2003 New Brunswick election campaign. Why I remember this so vividly was the strange response Premier Lord made at the time. When he heard the employed labour force dropped by 8,000 in one month – his response was “I don’t believe it”. Now considering Statistics Canada is one of the most respected national statistics agencies in the world, I would have thought he would have went with the usual boilerplate about typical monthly fluctuations, the longer term trend looks better, etc. but he chose to go with “I don’t believe it”. Anyway, he ended up taking a bit of a beating in 2003 and nearly losing what they had thought would be a sure thing election. I’m not sure the LFS swayed a lot of votes but it certainly was bad timing.

Take another look at the chart above. What happened the very next month? Almost a complete course correction. Now take a look at the labour force trend in New Brunswick in recent months (remember the labour force is the sum of those working and looking for work). In just the last couple of years I see at least three big month-to-month swings in the size of the labour market – down big one month and up big the next. This is the nature of the LFS. It is equally possible when the September LFS is published the NB labour market could have increased by 4,000 or 5,000 – or not. The point is that month to month trends are not reliable.

I have to admit it was kind of cute to see the government publish “lowest unemployment rate since 1976!” with a NB map graphic – and then the opposition published “biggest labour force decline since 1976!” minutes later.

Rather than snazzy infographics – both the government and the opposition should have used the data as a teaching moment. New Brunswickers need to understand that the long term trend for the labour force is that it is in decline. You have to go all the way back to January 2001 – the month before my youngest was born (now she is VP student council at Moncton High in Grade 11) to find the last time the labour market was smaller in July than it was last month.

A shrinking labour market is a drag on economic growth. Couple this with rising public service cost pressures (i.e. health care) and you have a long term challenge. We fix the challenge by deliberately growing the workforce with people who want to work the jobs on offer.

This is the biggest issue that no one really wants to talk about. I hear on a weekly basis someone saying that “little Jonny had to move to Alberta because there were no jobs here – why do we need immigrants?” The truth is there are lots of jobs if little Jonny wants to move around within New Brunswick and is prepared to take the jobs on offer. In January, Statistics Canada reported in its Job Vacancy survey there were 5,700 jobs available in that month alone. There were 1,800 jobs in sales and service occupations, nearly 800 in manufacturing jobs and 650 in trades related jobs and 600 in business and finance jobs. But the average wage on offer wasn’t particularly high for many of the jobs as shown in the following chart. If you can’t do the math on these jobs I will do it for you. On an annualized basis these jobs pay between around $23,000 and $34,000 per year.

But if we can’t fill these jobs, the economy will not grow and create the higher paying jobs that Jonny, who graduated with a liberal arts degree, wants and his mother thinks he deserves.

So we either a) find pockets of potential workers in New Brunswick and find a way to get them to take the jobs, or b) we allow the labour market to tighten even more and force up wage rates (by the way wages in New Brunswick on average have been growing much faster than the country as a whole for the past 3-4 years) or c) we find a new source of workers that want to work the jobs on offer.

Option A is not working too well and that is why the labour market hasn’t grown in 15 years (July to July). There are a whole bunch of reasons why people don’t attach to the labour market – from the 38,000 who collect EI each year to students for whom a job would be nice but not worth moving for or taking a job beneath them. In addition there is the issue of skills mismatch. A recently retired logger probably isn’t going to work in a contact centre.

Option B is kind of what we are doing already and how’s that working out? Annual real GDP growth since 2008 of well below 1 percent going back to 2008. Companies that can shift work out of New Brunswick are doing it (truckers, manufacturing line workers, etc.) and many that can’t or won’t just aren’t expanding here. Don’t get me wrong I think there is some potential to boost wage rates through productivity but at the point it triggers dis-investment – it is not worth it.

So that leaves Option C – the option used by Manitoba (fastest growing GDP since 2009) and essentially all provinces that are growing. Go find the workers – from far and wide – that you need in your economy to foster growth.

]]>http://davidwcampbell.com/2017/08/the-monthly-labour-force-survey-putting-little-jonny-to-work/feed/0To diversify or not to diversify – the economy – that is the questionhttp://davidwcampbell.com/2017/08/to-diversify-or-not-to-diversify-the-economy-that-is-the-question/
http://davidwcampbell.com/2017/08/to-diversify-or-not-to-diversify-the-economy-that-is-the-question/#commentsThu, 03 Aug 2017 11:17:01 +0000http://davidwcampbell.com/?p=6849Continue reading →]]>Jock Finlayson, from the Business Council of British Columbia, recently wrote a commentary where he suggested Canada’s export mix was not sufficiently diverse and too tied to the American market in the Trump era. He states that “Most other advanced economies – the U.S., Britain, Germany, France, the Netherlands, even Italy – exhibit greater product diversity in their export mix.”

There is some truth to his argument but there are also some nuances. First, you have to dance with the girl you took to the prom. Canada has large oil, gas, mineral deposits, large land area for agriculture, forestry and one of the largest coastlines in the world for fish harvesting. Because you are good in these areas isn’t a bad thing. Second, there are a few national industries not tied to these core natural advantages that are key exporters – auto manufacturing, aerospace manufacturing, film/media production, some pharma, and some financial services, less ICT but still important). The challenge here, and the little secret no one wants to talk about, is that it took (takes) huge subsidies and protections to see these industries emerge over many decades. As an aside, of course, New Brunswick generates virtually no economic value from any of these ‘national’ export industries.

So, what to do? If you rely too heavily on your core natural industries – you will get spanked by economists. If you – through huge subsidies, side-deals, protectionism – incubate a bunch of IP-based industries like auto/aero/film/finance – you are accused of picking winners/losers and distorting market forces. If you revert to the old tripe that a country should just open borders, cut taxes and red tape and sit back and wait for investment to roll in – where has that worked?

New Brunswick and national champion industries
Just to pick up on my previous point about NB and how it has fared in the national champion ‘business’ – take a look at the following table. It shows New Brunswick’s share of Canada’s international exports from the top 10 non-natural resources based sectors (i.e. agriculture, forest products, minerals, oil & gas, fish – I left plastic resins in there). Essentially, New Brunswick generates a trivial amount of international exports in these areas. We generate some exports in engineering services but relative to the national total still less than half our per capita amount. Same with tourism – the proxy here is accommodation services. And of course we generate virtually no export revenue in auto, aero, pharma. By the way, both Nova Scotia and PEI put up pretty good export numbers in aero and pharma.

Donald Savoie made another pitch for Maritime Union or at least better Maritime cooperation in a recent Halifax Chronicle Herald commentary. He focused his message at business leaders suggesting they should do a better job of promoting regional integration.

This has been an idea that is as old as Canada itself. I’ve been to multiple events where it has been discussed over the past 20+ years and at least the concept of formal Maritime Union never gets beyond the highest level discussion. I have said elsewhere – and continue to maintain – that if the region’s economy continues to stagnate sometime around 2026 Maritime Union will be more or less forced on the region by the federal government.

The good news is that trade between NB and NS has been going up in recent years (or at least the most recent years I have access to which goes up to 2013). Nova Scotia is now our second biggest export market by value at $2.4 billion compared to $3.9 billion to Quebec. If you look at what we are exporting there are a few interesting products and services. The bulk of exports comes from refined old and forest products but office administrative services (AKA contact centres) export revenue was over $113 million in 2013 and gambling was worth more than $63 million.

While I have been pushing the idea that New Brunswick needs to be focused more on where it fits in the global economy – investment, people and idea flows – that doesn’t mean we should ignore the low hanging fruit in our backyard. The Economist magazine runs stories its seems on a monthly basis of how trade flows continue to be stubbornly tied to geographic proximity (they are discussing it in the context of Brexit). New Brunswick should work closely with its partners in NS and PEI – government-to-government and business-to-business.

]]>http://davidwcampbell.com/2017/08/the-tantramar-marsh-export-strategy/feed/0Embrace and celebrate your inner snowmanhttp://davidwcampbell.com/2017/07/embrace-and-celebrate-your-inner-snowman/
http://davidwcampbell.com/2017/07/embrace-and-celebrate-your-inner-snowman/#commentsMon, 31 Jul 2017 18:13:09 +0000http://davidwcampbell.com/?p=6841Continue reading →]]>This may not be the best time of year to bring it up but…. New Brunswick has long, cold winters. There, I said it. I know that some of you will have your hands over your ears while chanting nah, nah, nah, nah but, no matter, it is true. New Brunswick has long, cold winters.

I raise this because we spend a lot of time trying to pretend we don’t have winter – to annually erase it from our collective memory. If you leaf through picture books of the province, you will rarely see a single snowflake. I recently watched a 8 minute promotional video for a city in Northern Ontario that never once mentioned or showed anything even remotely like winter. My wife has an old bag of Manitoba flour from 50 years ago (she uses it as a crafty decoration). It’s for Manitoba Hard Wheat – branded as “Island Queen” with palm trees. I guess the idea is that if you eat this flour you will feel like an Island Queen in Cuba or somewhere. Let’s be honest. At the corner of Portage and Main in Winnipeg during January and February doesn’t feel like the tropics – no matter how much wheat you pump down your gullet.

It’s not just Canadians. I was given a picture book back in the 1990s promoting the State of Minnesota. Yes, you guessed it. Not a single photo of winter or ice.

Now that we have to get serious about attracting people to live here we have to be honest about the weather. In fact, we should embrace and celebrate it. It is part of who we are. It is part of our culture. There are lots of things to do in winter – skiing, skating, sliding, hiking, snowshoeing, ice fishing, winter camping, bonfires, etc. etc. etc. Don’t hunker down. Get out there in the frostiness and grab a newcomer while you are at it.

The next time I pick up an NB picture book, or see a city promotional video, I hope there are images of snowmen, ice fishing shacks and people skiing. It matters now more than ever.

]]>http://davidwcampbell.com/2017/07/embrace-and-celebrate-your-inner-snowman/feed/1Startups: The Serengeti Plain or a fun summer camp?http://davidwcampbell.com/2017/07/startups-the-serengeti-plain-or-a-fun-summer-camp/
http://davidwcampbell.com/2017/07/startups-the-serengeti-plain-or-a-fun-summer-camp/#commentsSat, 29 Jul 2017 14:42:17 +0000http://davidwcampbell.com/?p=6837Continue reading →]]>It is interesting to see how government and economic development groups have evolved their view on start-up companies over the last 2-3 decades. Government has always given money to support people who want to start their own business. I’ll bet their was even more money around 20 years ago to give to folks wanting to become an entrepreneur. The Transitional Jobs Fund (then Canada Jobs Fund) was giving out money to just about anyone that was unemployed. As I pointed out then, it didn’t do much to move the needle – the number of self-employed people didn’t go up much and the number of incorporated businesses with employees flat-lined and has been declining. My point was that it takes more than $10,000 to make an entrepreneur and it takes more than a little government coaxing to make a gritty, bet the farm kind of entrepreneur that wants to build something here and take it to the world.

Nowadays of course start-ups are the hippest thing. Governments throw millions of dollars at incubators, accelerators, VC funds, Angel funds, start-up camps, university start-up programs – giddy up all with the goal of making it as easy as possible to start, and presumably, grow a business.

I don’t particularly have a problem with this although I hope that governments/economic development groups are not coddling or keeping alive bad business ideas in the name of economic development. I’ve said it many times before, if governments start treating economic development like social development we are in trouble. In social development we are specifically trying to raise people out of bad circumstances – bad business plans for their personal lives if you will and we hope to help them succeed even if there are ‘subsidies’ involved. In strong and dynamic economies bad business plans die and die quickly.

Many entrepreneurs will try 3-4 things before they get it right. My old boss at a startup I worked for cashed out his RRSPs and then had to beg friends and family just to make the payroll a few times. He was a true believer – a gritty entrepreneur willing to put up his own risk capital and nearly bought the farm on more than one occasion. Now he has 30 staff and by all accounts is doing quite well.

We want more entrepreneurs – particularly those with scale up ideas and ambition. But I am not sure we will get there by setting up shiny new incubation centres or offering summer camps for entrepreneurs. I think that exposing young people to entrepreneurship as a career path is a good idea but I think we need to give more thought to the ‘who’ and the ‘what’.

Governments and economic development agencies tend to be pretty good at answering the door. If someone comes to them and says they want to start a business or expand in the province or move here – there are lots of folks to help them out. But go out and find/recruit the best ambitious entrepreneurs from around the world? Not so much. Proactively going out and finding immigrants and enticing them to move here to work in key industries? Not so much.

Because that is much, much harder. It’s easy to sit at home and offer financial assistance for businesses that walk through your door. The other requires much more time and effort and risk. But in the competitive world we face these days, we must get out of the comfort zone.

In fact, just like entrepreneurs we need to see the economic development landscape more like the Serengeti Plain and less like a bouncy ball pit.

]]>http://davidwcampbell.com/2017/07/startups-the-serengeti-plain-or-a-fun-summer-camp/feed/1Are you a peacock or an ostrich? The thorny world of community rankingshttp://davidwcampbell.com/2017/07/are-you-a-peacock-or-an-ostrich-the-thorny-world-of-community-rankings/
http://davidwcampbell.com/2017/07/are-you-a-peacock-or-an-ostrich-the-thorny-world-of-community-rankings/#commentsMon, 17 Jul 2017 10:29:41 +0000http://davidwcampbell.com/?p=6831Continue reading →]]>For those of you that may have missed it the annual ranking of best places to live in Canada came out recently. This type of ranking is- to say the least – controversial but is it relevant?

It seems to me these kinds of ‘best’ rankings have been proliferating in recent years. In a world with a glut of media – it is hard to write stories that stand out – and rankings are an ideal way to get eyeballs – as long as the analysis has at least a veneer of depth to it. There are best places to live, best places to retire, best places to raise a family, best places to start a business, best places for Millennials, best places for immigrants – and that only scratches the surface.

In the new MacLean’s analysis the highest ranking NB municipality – out of more than 400 – ranks only 105. Because the analysis is biased towards fast growth, high incomes and low unemployment rates – a place like NB is disadvantaged out of the gate. In addition, because they split out every small municipality – the regional effects are ignored. For example, a small community with a high income, low unemployment and fast population growth will score high but all of those effects may be driven by the large urban community next door – the latter having higher unemployment, lower average incomes and slower population growth. Obviously the small community is benefiting by being in the orbit of the larger but there is no mention of this fact and no benefit to the larger urban centre for pumping up the rankings of its smaller neighbours.

What should a community do? I caution communities not to fully ignore these kinds of rankings. A few years ago an NB Cabinet minister was asked a question by a journalist and her answer was “we don’t like to compare ourselves to other jurisdictions”. I don’t even remember the issue at play but I remember her response seemed a little bizarre. If you don’t compare how do you know how well you are doing? It’s hard to see anyone or any organization striving to get better at anything if they don’t know where they stand.

My recommendation is for communities to look at rankings like this and all the different attributes that drive the rankings and see if there are ways to improve. There may be things that are out of their control and quite unfair (like the high ranking small community that is scoring high mainly because it is benefiting from the lower ranking larger urban centre next door) but there may be things that are in their control and addressable – walkability, bikeability, green spaces, affordable housing, etc. And for the bigger issues like population growth, income levels, unemployment, access to health care, etc. A fairly robust comparison to other cities/towns – should not be dismissed out of hand.

I’m not sure how widely these kinds of surveys/rankings are used in decisions of where to live, start a business, etc. but it can’t hurt given how widely these things are touted. Just about every community I have worked with will have their laundry list of “best of”. In fact, when she first moved here my wife used to joke about New Brunswick’s inferiority complex – we have the highest tides, longest covered bridge, largest axe, largest lobster, etc. – she never had visited a place that tried so hard to have some kind of trivial world beater in every community. Anything to even slightly capture the imagination of people.

I have said many times that the world is getting more competitive by the day. The competition for investment, talent and ideas has never been more pronounced. New Brunswick and Atlantic Canada need to take this seriously. We need to find our niche (s) in the world and pursue them relentlessly – or we will get swept out with the world’s highest tides – largest axe in one hand and largest lobster in the other.

]]>http://davidwcampbell.com/2017/07/are-you-a-peacock-or-an-ostrich-the-thorny-world-of-community-rankings/feed/0The difference between federal, provincial and local economic development: A primerhttp://davidwcampbell.com/2017/07/the-difference-between-federal-provincial-and-local-economic-development-a-primer/
http://davidwcampbell.com/2017/07/the-difference-between-federal-provincial-and-local-economic-development-a-primer/#commentsSat, 15 Jul 2017 10:56:20 +0000http://davidwcampbell.com/?p=6828Continue reading →]]>If a national government wants to grow and strengthen its economy, it would like to foster:
-More international exports (or import substitution where beneficial)
-More capital investment
-More international tourists
-National population growth
-Innovation and productivity gains

If a provincial government wants to grow and strengthen its economy, it would like to foster:
-More international and interprovincial exports (or import substitution where beneficial)
-More capital investment
-More international and interprovincial tourists
-Provincial population growth – from natural gains, or migration from other provinces or internationally
-Innovation and productivity gains

If a local government wants to grow and strengthen its economy, it would like to foster:
-More local services – particularly import substitution and services that attract people from outside the community
-More international, interprovincial and intraprovincial exports (or import substitution where beneficial)
-More capital investment
-More international, interprovincial and intraprovincial tourists
-Local population growth – from natural gains, or migration from other parts of the province, other provinces or internationally
-Innovation and productivity gains

]]>http://davidwcampbell.com/2017/07/the-difference-between-federal-provincial-and-local-economic-development-a-primer/feed/0NB ICT industry resurgence?http://davidwcampbell.com/2017/07/nb-ict-industry-resurgence/
http://davidwcampbell.com/2017/07/nb-ict-industry-resurgence/#commentsSat, 15 Jul 2017 10:26:54 +0000http://davidwcampbell.com/?p=6823Continue reading →]]>For those of you following this blog you will recall my concern over the state of the ICT industry recently. Its GDP contribution dipped from $921 million (real GDP) in 2011 to $852 million in 2015. In fact, in real terms, ICT GDP in New Brunswick in 2015 was similar to what it was way back in 2007 ($846.4 million). To put that into perspective every other province in Canada saw faster growth in ICT GDP over that period. Quebec’s rose by 23%, Saskatchewan by 24%.

But the NB ICT industry GDP contribution increased by 3.8% in 2016 and, in fact, accounted for 13% of the solid overall growth rate in provincial GDP between 2015 and 2016. Employment also seems to be rebounding (note that in the chart the percentages equal more than 100% because a number of sectors saw a decrease in their GDP contribution such as potash mining which alone reduced provincial GDP by 0.3% in 2016).

Encouragingly there seems to be some firms that are scaling too. Between June 2012 and December 2016 the number of IT firms with between 50-99 employees jumped by seven, the number with between 200 and 499 increased by four and one IT firm jumped into the 500+ category. Not that I exclude the ‘C’ in ICT here as there is one telecommunications firm with 500+ employees (Bell Aliant).

Despite this 1-2 years of encouraging trends, NB’s ICT industry continues to be among the smallest in Canada – tied with PEI and slightly larger than Alberta and Newfoundland – although that is really not a great comparison because Alberta’s overall GDP per capita is substantially larger than New Brunswick. We would like to see an ICT industry that grew in a sustained way for a sustained period of time driving exports growth, attracting capital investment, fostering innovation and providing good employment for young NBers.

]]>http://davidwcampbell.com/2017/07/nb-ict-industry-resurgence/feed/0Fredericton’s engineering cluster: At a fork in the roadhttp://davidwcampbell.com/2017/07/frederictons-engineering-cluster-at-a-fork-in-the-road/
http://davidwcampbell.com/2017/07/frederictons-engineering-cluster-at-a-fork-in-the-road/#commentsFri, 07 Jul 2017 11:22:11 +0000http://davidwcampbell.com/?p=6817Continue reading →]]>There are basically two possible trajectories when a national or international firm buys a local one. They either grow it or they let it whither away until they eventually close it. I have seen this pattern play out many times over the past 25 years for everything from meat packing to e-Learning software.

This came to mind when I read yesterday about the acquisition of what was left of ADI after a previous acquisition several years ago. The acquirer was effusive in its praise of ADI and its technology.

For the most part I have no problem with national and international firms buying up NB firms. It monetizes the value of the firm and the efforts the owners have put in over the years. I’ve seen cases in this province of firms being valued at $10 million or more one year and nothing the next so when owners feel it is a good time to sell I’m not the guy to criticize the decision.

Truth be told a tie-up like this could end up being good for NB. As part of a larger global concern ADI could now expand its global markets leading to more jobs and economic activity here.

But it is also possible – now that the locus of control for the firm has shifted to Pittsburgh – that they will let the Fredericton operation slowly wind down and at some juncture in the future – likely during a period of rationalization – the firm will close its Fredericton office and move some of the top talent to the steel city.

Fredericton saw a cluster of high value engineering firms emerge after WW2 – leveraging expertise built up addressing local market demand (e.g. NB Power) and the surplus of engineering talent pouring out of UNB over the years. The city has one of the largest concentrations of engineering workers in Canada and the value of exports – this is a W.A.G. – of something like $150 million/year.

But now that the cluster is substantially owned by firms based elsewhere – EXP, Stantec, Evoqua, etc. there is a risk that it will decline in the coming years as the international owners downsize their Fredericton offices to just serve local markets. Why have an export-focused operation out of little ol’ Freddy Beach? The air connections are not nearly as good as Toronto, Calgary or Pittsburgh and New Brunswickers aren’t exactly know for their salesmanship.

We need to protect and grow this cluster. Imagine a $150-$200 million export revenue sector with very little government incentives or ongoing support (see the chart). But why would a bunch of people in Pittsburgh, Calgary or wherever care about Fredericton? They don’t and they won’t. We need to make sure the value proposition is so compelling they will see the $$$ by continuing to invest in and grow their Fredericton operations. How do we do this? By ensuring the UNB (and NBCC) talent pipeline is continuing to turn out a surplus of talent. By ensuring this talent has cutting edge skills. Ideally UNB would be engaging these firm in R&D projects that binds them to New Brunswick. And, generally, by ensuring the government influenced business environment remains competitive (taxes, regulations, timing, etc.). And, ideally, the money flowing into NB through these acquisitions should lead to more engineering startups and another wave of new engineering entrepreneurs like ADI and a virtuous economic development cycle continues.

]]>http://davidwcampbell.com/2017/07/frederictons-engineering-cluster-at-a-fork-in-the-road/feed/1The puzzling focus on expanding the number of Atl. Canada exportershttp://davidwcampbell.com/2017/07/the-puzzling-focus-on-expanding-the-number-of-atl-canada-exporters/
http://davidwcampbell.com/2017/07/the-puzzling-focus-on-expanding-the-number-of-atl-canada-exporters/#commentsThu, 06 Jul 2017 12:51:21 +0000http://davidwcampbell.com/?p=6814Continue reading →]]>I’m a big fan of the Atlantic Provinces working together to address challenges we have in common and pursue opportunities where there is alignment of interests. The idea of the Atlantic Growth Strategy is a good one – therefore – but I do find some things puzzling.

For example, the exports development strategy. The provinces and the federal government are going to spend an additional $20 million over five years on export market development with the goal of boosting the value of exports by 30% and double the number of exporters.

The first issue is one of definition. What is an export? Some people define it has international merchandise exports because we get monthly robust data on this type of exports. Some include interprovincial exports which are a huge source of revenue but these exports are harder to track. Most don’t think about services exports – these are also a huge source of export revenue – again just harder to track. How about tourism? Technically speaking tourism is an export sector as it brings money in from outside the province to access a service.

The same challenges apply when we talk about ‘exporters’. Is an NB firm that does construction work in Nova Scotia an exporter? For the feds – unlikely – but for NB export revenue is export revenue.

But based on the data and definitions we do have, I’ll make a few observations.

First, I don’t understand this notion of doubling the number of exporters. This has been part of New Brunswick’s strategy for years and the numbers are going down (see the graph). To double the number would take a roughly 15% growth rate – per year for the next five years. The math isn’t good – $20 million to foster 2,200 more exporters – or less than $10,000 per exporter. It will not happen, period.

Plus it doesn’t matter. One exporter that generates $1 billion in new export revenue is the same as 1000 that generate $1 million in new export revenue (ceteris paribus). Of course this is facetious but not really. There is something to be said for scale – a few large exporters are likely a lot better for an economy than hundreds of small exporters.

The main point here is that goals drive focus. If your focus is on getting 2,200 firms to export more you will put huge time and energy to try and get as many small firms as possible to export more. If your focus was on developing one our two export industries – you could concentrate economic activity. For example, New Brunswick is going hard after cybersecurity. Through startups and the attraction of national and international firms it might end up with 10-15 new exporters within five years – generating $10s of millions in export revenue. But this will only happen with an intensive, focused effort of resources. I’m not sure what the budget for the cybersecurity cluster is but if you include R&D spending, etc. it is in the millions of dollars per year. One mining project – Sisson – will boost export revenue by several hundred million. A 50% increase in business services export revenue (remember it is already a $1.4 billion dollar export industry) would boost exports by $700 million – via a handful of firms. If NB were to attract a Google development centre that would likely drive $10s of millions worth of export revenue.

Finally, I’ve said this a hundred times and likely it will never happen but I think we need to do a better job of alignment – investment, trade, talent, ideas. If we think there is potential to develop a certain region in India across multiple fronts we should put a team in place – in market – with proper resources and political support – and develop that market in an intensive way. Ontario has economic development offices in something like 16 countries, BC, Alberta, Quebec (has 100+ staff in France alone). We in Atlantic Canada have something in the range of 1,500 economic developers (fed, province and local) and they are all (or almost all) located in the region and focused on squeezing a little more juice out of the regional lemon.

If we really want to boost immigration, exports, investment and ideas – we will have to get beyond superficial efforts. Working collectively as Atlantic Canada should provide some scale to do this.

]]>http://davidwcampbell.com/2017/07/the-puzzling-focus-on-expanding-the-number-of-atl-canada-exporters/feed/1Video killed the radio star, Twitter killed the blogger, Twitter killed Twitter… How about LinkedIn?http://davidwcampbell.com/2017/07/video-killed-the-radio-star-twitter-killed-the-blogger-twitter-killed-twitter-how-about-linkedin/
http://davidwcampbell.com/2017/07/video-killed-the-radio-star-twitter-killed-the-blogger-twitter-killed-twitter-how-about-linkedin/#commentsTue, 04 Jul 2017 11:25:43 +0000http://davidwcampbell.com/?p=6812Continue reading →]]>David Jonah convinced me to start blogging back in 2004. Since then I have written 3,463 posts. Likely most of it is crap – with a few nuggets of value along the way.

It’s interesting to see how things have changed in that time. In the early days I would get several hundred readers of a typical blog post – sometimes a thousand or more if it was a hot topic or during an election period when people seemed to be far more active. Then along came Twitter and readers to my blog started to slowly decline. The expansion of social media mostly reduced my readership to a rump of diehards that either liked or hated my stuff. By the way this trend exhibits itself in the comments section. In the early days I could get 100 comments on a popular blog – now it is common to get none directly on the blog itself (a few on social media).

It seems clear to me that people are crumbling under the weight of their social media and stuff like mine falls into the ‘read the headline’ and move on. I can write a 1,000 word blog with tables and charts – and get a few views and a couple of ‘likes’ on social media. If I wrote “Trump is a bum” on Twitter I would get a thousand likes and retweets. I’m not sure what that means but I hope we haven’t reduced our thoughtful media consumption to 140 characters and highly provocative content just because it stands out.

Anyway, along comes LinkedIn. I more or less didn’t think much of LinkedIn until recently – a place you put your resume. But since I started posting to LinkedIn I am getting several hundred hits per post. I assume this is because a) people aren’t crumbling under the weight of trivial posts on LinkedIn like they are on Twitter (I had to stop following some folks because every day it was just a constant stream of anti-Trump posts – from a Nobel prize winner, no less); and b) folks in my LinkedIn ‘network’ would have a more natural interest in the subject matter.

So, video killed the radio star (not really), Twitter killed the blogger and LinkedIn to the rescue. Long live LinkedIn.

]]>http://davidwcampbell.com/2017/07/video-killed-the-radio-star-twitter-killed-the-blogger-twitter-killed-twitter-how-about-linkedin/feed/1Can small North American jurisdictions grow without a significant mining/oil and gas sector?http://davidwcampbell.com/2017/07/6806/
http://davidwcampbell.com/2017/07/6806/#commentsTue, 04 Jul 2017 11:07:05 +0000http://davidwcampbell.com/?p=6806Continue reading →]]>One of the main concerns I have had over the years is whether or not a small jurisdiction in North America can grow its economy in a sustained way without a large boost in mining/oil and gas development. The experience in Canada isn’t very heartening. Among the small provinces – significant growth in the economy over time tends to be correlated to a heavy expansion of mining/oil and gas development – Saskatchewan and Newfoundland and Labrador (before the oil price collapse). The notable exception is Manitoba. As I have written elsewhere Manitoba has embarked on an immigration-led economic growth strategy. PEI has made a smaller attempt at this.

But 10 provinces is a small sample. What about in the US? At first glance the same, disheartening trend seems to hold. North Dakota’s GDP over the past decade has boomed up a cumulative 72% but the mining sector GDP is up 582%. Oklahoma likewise had strong GDP growth but mining GDP is up 86%.

But looking at all smaller states there are some interesting ones. Iowa, Montana, Nebraska, Oregon, South Dakota, Utah and Washington have all witnessed well above GDP growth over the past decade – with flat or declining GDP from mining. How? They are small states, many geographically isolated, etc. Frankly, they look a lot like New Brunswick.

Iowa – It’s growth was led by agriculture, finance and insurance, professional services, accommodation and food services, and administrative services.

A first level read on this is heartening for a place like New Brunswick. We have growth potential in agriculture, too. We have generated considerable export revenue from professional and business services. We have not been as successful with information, education and manufacturing. It’s also interesting that tourism (the proxy industry accommodation and food services) only shows up once as a significant contributor to GDP growth (Iowa). Generally speaking accommodation and food services GDP will track – over time – overall industry growth as it mostly services in-state demand. States with growing tourism sectors will see GDP growth outpacing the overall economy. As the chart shows only one of the states here saw A&F GDP grow faster than the overall economy.

The challenge, of course, comes back to what are the drivers of export-led growth in sectors such as professional services, business services, and even agriculture to a lesser extent. The main driver is talent. Jurisdictions that can’t supply workers to these industries will not see growth. Firms looking to service export markets will not set up and grow in places that cannot supply the talent for growth.

It’s good news that a few small states (and Manitoba!) have shown the way here with strong GDP growth over a longer period of time without the benefit of mining/oil and gas.

]]>http://davidwcampbell.com/2017/07/6806/feed/1Calling Malcolm Gladwell: Walk amongst the elephants in the Atlantic Canada roomhttp://davidwcampbell.com/2017/07/calling-malcolm-gladwell-walk-amongst-the-elephants-in-the-atlantic-canada-room/
http://davidwcampbell.com/2017/07/calling-malcolm-gladwell-walk-amongst-the-elephants-in-the-atlantic-canada-room/#commentsSun, 02 Jul 2017 13:31:57 +0000http://davidwcampbell.com/?p=6801Continue reading →]]>I listened recently to a podcast of a lecture given by Malcolm Gladwell where he mentioned that some people say he is the master of “dumb, obvious points”. He then went on to discuss a dumb, obvious point about something. I think we should have Gladwell come to Atlantic Canada to take a look and discuss our dumb, obvious points. Maybe someone might listen.

For example, take a look at this graph. Since 1991, the population aged 20-44 has dropped by 250,000 across Atlantic Canada – a substantial drop that is more pronounced as the boomers head into retirement. The wave of younger Canadians that powered economic growth in the region for decades crested in 1991 – 25 years ago – and has been receding since.

Take a look at the same graph for Canada. Around 1991 the population aged 20-44 crested – just like Atlantic Canada – but David Foot published his dumb, obvious point about booms, busts and echos and the country cranked up the importation of young talent from abroad. This effort arrested the decline and led to strong growth in this age cohort in the last decade. Interestingly some groups like the Conference Board say this is not enough – that Canada needs to dramatically increase its immigration in the coming years.

There are more dumb, obvious points. Atlantic Canada’s economy is in the midst of substantial upheaval due to demographics, changing industries and increased global competition. We need to be far more focused on internationalizing our economy. Politicians gleefully talk about the level of exports generated from this economy but fail to mention that these exports are still primarily centered on natural resources. If you back out lobster, oil, wood, etc. the region is not particularly good at exporting – with the someone maligned sector – contact centres/business services – as a more than $2 billion export sector for the region.

Here’s another dumb, obvious point – federal government support should align with the region’s needs. In reality it tends to be the opposite. Ontario, Alberta and BC – growing provinces will demand the feds provide cash for public transportation, new roads/bridges and post-secondary infrastructure to respond to rapid population growth. The feds will say sure thing and develop a national program offering cash if you build new public transportation, roads/bridges and post-secondary infrastructure – and you have to put your own money on the table too. So a place like Atlantic Canada will get hundreds of millions of dollars to build new infrastructure even as the population that will use that infrastructure is stagnating or even decline. Why wouldn’t the feds take a couple of hundred million out of that pie and put it where it is needed – to actually grow the population needed to use infrastructure? Because that is not the way things are done in Canada. The feds – Libs and Tories alike- develop national programs based mostly on Ontario, Quebec, etc. requirements (think about the new bias towards large clusters such as AI) and then try to force them to fit in the Atlantic Canada context.

There are certainly many other dumb, obvious points – or elephants in the room – around local government reform, urbanization, new sources of entrepreneurship, how to use our smaller universities to drive R&D, etc. But there isn’t much interest in doing anything substantial about it.

So why not bite the bullet and bring in Galdwell – he probably charges $100k just to show up – and maybe he can make the dumb, obvious points and maybe someone might listen.

]]>http://davidwcampbell.com/2017/07/calling-malcolm-gladwell-walk-amongst-the-elephants-in-the-atlantic-canada-room/feed/1New Brunswick at Canada’s 150th – what will 200 look like?http://davidwcampbell.com/2017/07/new-brunswick-at-canadas-150th-what-will-200-look-like/
http://davidwcampbell.com/2017/07/new-brunswick-at-canadas-150th-what-will-200-look-like/#commentsSat, 01 Jul 2017 11:18:02 +0000http://davidwcampbell.com/?p=6795Continue reading →]]>I am increasingly of the view that New Brunswick and its communities actually spend too much time on introspection. A little introspection – time on the couch – is good. Too much leads to paralysis.

But on a momentous birthday, a little introspection is good. What if New Brunswick’s population had increased just at the national average since 1971? As shown in the graph, we would have 1.06 million population today and the province would look much different than it does today.

The so-called EI dependency problem would have gone way down. People complain about the large number of people who collect EI every year. Well, the number is actually about 35,000 – those who go on EI at some point during the year – on an ongoing basis. Assuming that number didn’t grow by 2016 it would only represent about 6.4% of the labour market in 2016. In other words we would grow our way out of the EI problem. Don’t forget there are nearly 100,000 people that collect EI every year in Ontario (and 156,000 in Quebec). Why no one is blowing their top about all the lazy Ontario-ians is that the 100,000 EI users is out of a labour force of 7.5 million. If we had witnessed just our share of Canada’s population growth since 1971 we would have significantly reduced the EI dependency issue through growth alone.

Urban growth would have been much more robust. Most net new population growth in Canada occurs in urban centres so it is safe to say that a large share of the 305,000 lost population growth would have occured in places like Saint John, Edmundston, etc. Remember Saint John back in the early 1970s had projected a regional population of 250,000 by now – not far off where it likely would have been if we had attracted our share of Canada’s population growth.

It is likely that government spending would have been more sustainable. This is not a given as governments tend to use the dividends of growth to spend more. Alberta, Saskatchewan and Newfoundland and Labrador have the highest per capita provincial government spending as a result of their boom years. Back in 1990s SK and NL spent about the same as NB on a per capita basis now they are 16% and 27% higher respectively.

Our demographic situation would be much stronger. Canada’s median age is 10% younger than NB – in demographic terms that is a big difference.

Finally, this level of growth would have assumed a strong and sustained level of immigration over the 45 year period. A rough estimate would suggest about 23% of our population would be landed immigrants rather than the 5-6% it is today. I think this would have enriched our province over the period.

Why does it matter? The Self-Sufficiency Agenda back in 2007 called for population growth of 100,000 by 2026. We are 2017 and the population has barely budged. Twenty years ago the est. population was roughly the same as it is today. Canada, just in case you are wondering, added 6.4 million to its population over the same period.

Looking forward to Canada 200 there are basically two trajectories for New Brunswick. Either this province will have a much larger population or it will have merged with NS and PEI and will be a rump of its former self.

]]>http://davidwcampbell.com/2017/07/new-brunswick-at-canadas-150th-what-will-200-look-like/feed/0Distracted by a lack of older NBers learning French? This is a bigger problem:http://davidwcampbell.com/2017/06/distracted-by-a-lack-of-older-nbers-learning-french-this-is-a-bigger-problem/
http://davidwcampbell.com/2017/06/distracted-by-a-lack-of-older-nbers-learning-french-this-is-a-bigger-problem/#commentsFri, 30 Jun 2017 15:00:56 +0000http://davidwcampbell.com/?p=6792Continue reading →]]>I am somewhat wary of dipping toe into any conversation about bilingualism in New Brunswick because, well, just because. I am sure that a lot of readers are nodding their heads in agreement.

Anyway instead of worrying about why more English NBers are not taking up language training later in life we may want to worry about one of the real challenges. It looks like, somewhat ironically, that French immersion graduates are more likely to leave New Brunswick than English only graduates. The following table is taken from the 2011 NHS. The bar here is quite low – persons are asked if they have knowledge of French. Presumably, virtually all graduates of French Immersion would answer yes to this question.

I don’t know the exact percentage of NB anglophone students in immersion but it is fairly high around 1/3 of total students (the table below aligns with this). High enough that it should have, over time, a significant impact on the numbers.

But if you look at the data – young anglo NBers in school have ‘bilingualism’ rates in the 30%+. Then it steadily declines to basically 20% in the 30-49 age group and reverts to the provincial average for all age groups for people 40+. Back in 2000, 32% of Anglos were enrolled in French Immersion. Someone who graduated high school in 2000 would have been nearly 30 by the time of the 2011 NHS.

Now before you get out your calculator – my math on this is fairly simple. If kids in French Immersion are showing bilingualism rates of 33% – then you would think that this level would hold – dip a bit from inward migration, etc. but the fact that 33% claim knowledge of French when they are 18 and only 21% do by the age of 30 looks like to me that we are exporting a fairly significant share of bilingual anglophones. The conventional wisdom is that unilingual anglos have to leave because they don’t speak French. It looks like the opposite is taking place.

If we want to foster a bilingual society – at least at a conversational level – we more anglophones speaking French. The best time to learn is during school. If we lose them after then…..

]]>http://davidwcampbell.com/2017/06/distracted-by-a-lack-of-older-nbers-learning-french-this-is-a-bigger-problem/feed/0Fostering startups among dominant industry supply chainshttp://davidwcampbell.com/2017/06/fostering-startups-among-dominant-industry-supply-chains/
http://davidwcampbell.com/2017/06/fostering-startups-among-dominant-industry-supply-chains/#commentsFri, 30 Jun 2017 11:07:22 +0000http://davidwcampbell.com/?p=6784Continue reading →]]>In October 2016, an old friend of New Brunswick Tim Coates partnered with one of the best researchers on what it takes to be a successful entrepreneur, Daniel Isenberg, on an important piece of analysis. Published in the Harvard Business Review, the pair found that many of the most successful startups can be found in large corporation supply chains. This was an interesting finding as a lot of the better known startups actually service end markets – think Uber, Airbnb, etc.

Another deep thinker, the estimable Dr. Herb Emery at UNB, made an almost throw away comment in a talk he gave recently. He said that historically – and he meat this in the literal way – most startups occur in a region’s dominant industries. If you have a large agricultural sector, entrepreneurs will rise up to address a market need locally and then take that innovation to national and international markets.

An an example, look at the agricultural implement manufacturing sector. If Emery is right there would be a significant correlation between the size of the agriculture sector and the number of firms in NAICS 333110 serving this industry. In fact, this is correct. Ontario generates $4.4 billion worth of GDP from agriculture (direct) and has 83 firms serving the industry in NAICS 333110. There are two adjacent counties – Waterloo and Wellington – that are home to nearly 10% of all the NAICS 333110 firms in Canada (there may be a Mennonite tie-in here but that is beyond my scope for today). There are two counties in Manitoba that are also home to 10% of the national total.

Just to allay your fears that these firms are just a few Mennonites building their own scythes, take a look at the export data. As with the firm intensity, international export intensity is correlated to provinces with large agricultural sectors. The data in the table is shown in $Millions just in case you are wondering. So the Emery-Coates-Isenberg thesis seems to hold.

Now, we turn our attention to NAICS 333245 – Sawmill and woodworking machinery manufacturing. As you would expect there are lots of firms in this sector in BC, Quebec, Ontario as those provinces have large forest products sectors. But the outlier here is New Brunswick. Even though the province has a very large forest products industry it has only one firm in this part of the supply chain. If it had its ‘share’ of the national total it should have closer to 5 – or 5x as many as it does. For those of you who are curious the exports profile fits the pattern. Ontario generates $131 million, Quebec, $75 million, BC $44 million and NB $1.2 million from this sector.

Again, this isn’t really a ‘small’ versus ‘big’ province issue. In the agricultural implement manufacturing sector Manitoba and Saskatchewan are home to 36% of the national total even though they are ‘small’.

Bottom line? We need to put more brainpower to this issue. Why are we not seeing innovative startups in our dominant industries such as forest products, seafood processing, blueberries, maple syrup, contact centres, etc.? Don’t get me wrong there are some notable exceptions – Remsoft comes to mind – but we need to see more.

How? It is already beginning. McCain Foods has a new initiative to deliberately work with startups to help address its big challenges and drive productivity. Resson Aerospace is a good example here. We need the rest of NB’s large firms to step up and think about how external startups could be part of the solution to their business challenges.

It’s a win-win. The firms can access an innovation sandbox that would be almost impossible to replicate internally. The startups get access to local markets – to get really good at something they can then take into global markets.

Where do the entrepreneurs come from? That is broadly a subject for another day but they should be spinning out of the large firms themselves (restless), emerging out of universities (IP) or being attracted to New Brunswick to take advantage of a market need.

This should be part of New Brunswick’s startup ecosystem 2.0. Over the last decade the infrastructure to support startups has ballooned but IMO there has been limited focus on how to align this with our big sectors and the Herb Emery wisdom.

]]>http://davidwcampbell.com/2017/06/fostering-startups-among-dominant-industry-supply-chains/feed/0The unemployment and education gap between young men and young women is wideninghttp://davidwcampbell.com/2017/06/its-not-raining-men/
http://davidwcampbell.com/2017/06/its-not-raining-men/#commentsMon, 19 Jun 2017 11:14:26 +0000http://davidwcampbell.com/?p=6771Continue reading →]]>Back in the 1980s Tom Peters was among the first thinkers to suggest that women would rule the knowledge-based economy of the future. I recall he said something about men being good for heavy lifting or something similar to that.

We talk a lot about income parity, fairness, expanding opportunity, etc. but we are rarely talking about men. And for good reason. Men still earn a fair premium over women – even when adjusting for age and occupation – although when adjusting for occupation the numbers are improving.

But there is a specific challenge with men and at some point we will need to talk about it. The unemployment rate among young men (all men really) in New Brunswick is starting to decouple from the rate for young women. The unemployment rate among women aged 25-44 dropped to 6.7 percent in 2016 and is now at historic lows across the province. For men, however; the unemployment rate has been rising and now sits at over 12 percent.

Another way to look at this is the spread between the unemployment rate for men versus women. In 1990, the unemployment rate among young men in NB was actually a hair lower than for women but it now sits at 80% higher. Specifically, the share of the male labour force that was unemployed in 2016 was 80% higher than the share of the female labour force that was unemployed.

The challenge is particularly an issue among New Brunswickers without a university degree. The unemployment rate and spread between men and women with a university degree is much lower (men 4.6%, women 3.5%).

What is going on here? We will have better information to work with in the Fall when the new Census data is released but it looks like there are not enough jobs for non-college or university educated men – or more specifically men are not particularly interested in the jobs on offer that match with their education level and income expectations. Take a look at the changing income profile of men in the following table. There has been a steep decline in the number of young men reporting earnings of less than $50,000 per year between 2004 and 2014. while there has been an even sharper decline in the number of young women reporting less than $25,000 in annual income there has actually been robust growth in the number reporting between $35,000 and $50,000 – while among men this cohort too is in significant decline.

So, the number of men earning $50k and up is up robustly but down significantly for those earning less than $50k. Incidentally among the relatively rare group of young people earning over $100k/year – young men still significantly eclipse women. Between 2004 and 2014 the number of men aged 25-44 earning $100k increased by over 5,000 while increasing only by 1,220 among women in the same age group.

I’ll leave you with one last chart on this. In the 1990s the number of university educated men and women aged 25-44 in the labour force was roughly equivalent. In the last decade or so it has started to seriously decouple. In this age group there are now 64% more women with university degrees in the labour market than men.

A growing spread in unemployment between men and women and a growing spread in the education level between men and women is probably something we should keep our eye on.

]]>http://davidwcampbell.com/2017/06/its-not-raining-men/feed/0Immigration-to-atlantic-canada-for-dummieshttp://davidwcampbell.com/2017/06/immigration-to-atlantic-canada-for-dummies/
http://davidwcampbell.com/2017/06/immigration-to-atlantic-canada-for-dummies/#commentsThu, 15 Jun 2017 12:36:11 +0000http://davidwcampbell.com/?p=6764Continue reading →]]>Since I didn’t get my invitation to speak to the parliamentary committee studying immigration and Atlantic Canada even though I probably have analyzed more data on this than just about anyone else, I’ll give you my thumbnail analysis of the issue here.

New Brunswick (and for the most part Atlantic Canada) hasn’t had a ‘wave’ of immigrants – i.e. an amount that significantly impacted population levels – since the mid 19th century. This needs to be front and centre in the conversation. Integrating new immigrants into existing strong immigrant ecosystems (i.e. the large urbans) is easier. Integrating immigrants into western Canada – which built much of its current population on inward migration is easier. Integrating new immigrants into Atlantic Canada with no recent history will be harder and will require significant community-level focus. I have suggested that every immigrant family should be paired with an NB family for at least a year to help integrate them into the community.

New Brunswick has a long history of little interest in attracting immigrants. After WW2 Canada accepted a wave of new immigrants – mostly from Europe. I read an academic paper on this recently that stated the NB premier at the time said he didn’t want more immigrants to New Brunswick because of that old canard about ‘unemployment’ here. This could have been the largest single misstep in NB history. The example across North America is clear – communities with sustained immigrant flows tend to have lower unemployment rates. Our preoccupation with seasonal industries-EI-inflated unemployment has distorted the conversation on immigration. I believe if we had put a greater focus on immigration it would have led to fewer young people leaving the province.

Immigrants are essentially the only source of labour force growth across the country. Between 2010 and 2016 the Canadian labour force expanded by just under 900,000 and 823,600 were landed immigrants. In provinces such as New Brunswick the born in Canada workforce has been in decline for multiple years. I can’t see any way to boost the provincial labour market without a dramatic expansion of immigration.

Immigrants will be more mobile than entrenched, multi-generational Canadians. Get used to it. Interprovincial mobility rates rose when Manitoba started to significantly expand its immigration a decade ago. We can’t obsess over this. I found out this week that two of my favourite immigrants were leaving – both to western Canada. This is a reality. They don’t have the anchors here that many of us have. We can and should do more to anchor them here – networks, schools, churches, etc. but we shouldn’t use this as an excuse to not attract immigrants. We just need to ensure that we have two coming in for every one that leaves. And this excuse that we will flood Toronto with immigrants is pathetic. The broader Toronto region attracts nearly 100,000 immigrants per year. Any residual coming from Atlantic Canada would be a rounding error.

Don’t obsess with ‘young people leaving’. We encourage a large share of young people to go into university even as there are thousands of new jobs every year that don’t require university degrees – manufacturing, natural resources, services, etc. That’s okay but don’t expect them all to stay in New Brunswick. If you want university educated folks to stay you need a) a growing economy that is creating more local market-focused university education requiring jobs (dentists, nurses, lawyers, accountants, etc.); 2) an economy that is created more university education requiring export-focused jobs (engineers, computer programmers, designers, etc.) or 3) an economy where young educated people are starting new firms. Other than that let ’em leave. I find the people I meet that have spent a few years outside New Brunswick bring back valuable knowledge and perspective. In fact, I would like every New Brunswicker to spend at least a year living outside the province.

Focus immigration efforts on attracting family and friends of existing immigrants. This should be a no brainer. As the fed speed up processing times for family class immigration nationally this will have little impact here because we have very few immigrants to begin with. We should encourage the clustering of immigrants (not the ghetto-ization of new immigrants – big difference) and design our immigration programs to encourage/incentivize this.

Dramatically boost international post-secondary students – particularly in occupations that could be used to grow export industries. Someone told me recently that UNB Fredericton has more engineering graduates living outside New Brunswick than living and working in-province. They were critical of this. Why? Fredericton has one of the highest concentrations of engineers in Canada and a 40% export rate. I say over-enrol and over-graduate people in key occupations such as computer programming, engineering, etc. and if some leave – who really cares? Many will stay. Many entrepreneurs will take advantage of this labour pool to start firms. Worst case. The kids stay here during school and spend, on average, $25,000 per year in our province. And for immigrant students, they get to spend 2-4 years putting up with our winters. If they survive they are good candidates to stay longer term.

Set hard targets. There is a lot of wishy-washy on this which surprises me. I can line up a number of economists that would say if you want to grow the Atlantic Canada economy in a sustainable way over the next couple of decades we will need to bring in at least one percent of the population each year as immigrants (Manitoba is running around 1.5% and the have the fastest GDP growth in the country). Just do it. Set a target of 7,500 to 8,000 for New Brunswick and then work backwards to figure out the resources needed to make that happen.

Tie new immigrants to actual jobs. This is a bit counter-intuitive to my previous arguments but hear me out on this. If you bring immigrants on a point scale that rewards highly educated immigrants but isn’t aligned with the needs in the labour market – that is a recipe for outward migration. If we need home care workers, assembly line workers, truckers, contact centre agents, fish plant workers, etc. bring immigrants with the skills and aptitude to work those jobs. Pay them a competitive wage and they are far less likely to leave because they would end up in a similar job at a similar salary in Toronto but in a higher cost of living environment. Now, I’m not suggesting New Brunswick should go out and actively attract firms with ‘low wage’ jobs to move here but we need to ensure the NB labour market is meeting local demands – particularly for export-focused industries. We can and should focus our growth efforts on higher wage jobs, entrepreneurship and other high value areas that should attract and retain immigrants (and NBers).

Reorient economic development from financial support for SMEs to talent attraction. The feds gave Atlantic Canada the immigration pilot (thank you) and then said but there is no new money for these immigrants (huh?). Normally the feds provide a cash payment per immigrant to fund things like settlement services. But not this time. This is an oversight. Both federally and provincially we need to divert significant spending to talent attraction. ACOA should become 50% a talent attraction agency. Our provincial efforts should move significant dollars towards talent attraction and retention. We talk a big game but until we put our money where our mouth is we will get limited results.

Finally, the federal government needs to fundamentally rethink this. They may be still sore from the snub in the mid 1940s. Imagine. Back then the feds were begging us to take more immigrants. Now the attitude is the opposite. If the feds want a prosperous and sustainable Atlantic Canadian economy they need to work with us on a serious plan to attract and retain more immigrants here – entrepreneurs, skilled workers, not-so-skilled workers, post-secondary students, rural, urban – across the board. There is zero value to Canada – and its social cohesion in the coming years – to have one region of the county withering away for no good reason. Atlantic Canada has underpopulated urban centres, lots of wide open, rural areas, fallow farmland, lots of minerals and other natural resources. It’s very easy to start a business here. There are no real structural reasons why we could not see a wave of new population. EI? Get over it. I have heard this excuse for 30 years and I am tired of it. If the feds want to massively reduce the number of people that use EI every year in New Brunswick then change the program. If not don’t turn around and beat us over the head with it as a reason not to attract immigrants.

]]>http://davidwcampbell.com/2017/06/immigration-to-atlantic-canada-for-dummies/feed/0The bonfire of my vanitieshttp://davidwcampbell.com/2017/06/the-bonfire-of-my-vanities/
http://davidwcampbell.com/2017/06/the-bonfire-of-my-vanities/#commentsSat, 10 Jun 2017 11:24:33 +0000http://davidwcampbell.com/?p=6754Continue reading →]]>My working hypothesis for the past 20+ years has been that New Brunswick could be a place that achieves strong economic growth, boosts its population, has dynamic urban centres and strong rural economies. The problems, it seemed to me, were surmountable. We just needed to work on a few fundamentals – boosting population through immigration, attracting more global investment, fostering more high growth potential entrepreneurs, getting the federal government to see the region as a potential source of growth rather than a headache to be managed, etc. All we had to do would be agree on a few key principles and then drive those principles for 10, 15, 20 years. In my view the McKenna years could have been the springboard for a growth agenda. And why not? The province is vastly underpopulated relative to its potential. We could easily accommodate 1.5 million in New Brunswick without breaking a sweat. Growth in Atlantic Canada in general would be good for the country as it would show that all areas have the potential to grow and would bind us better as a nation because simmering resentments would be tamped down.

Bu the truth of the matter is that after 2+ decades of study maybe my working assumption may have been wrong all along. Maybe there is something that is fundamentally holding New Brunswick and the Atlantic region back. I have read just about everything published on the subject such as Donald Savoie’s tomes, Hal Frederick’s work on the efforts in the 1950s, etc. But we can’t escape the data. The fact is that despite all the dollars invested, all the plans, all the rhetoric, successive rounds of dewy-eyed federal and provincial politicians the numbers are just getting worse. Savoie’s Visiting Grandchildren has data going back to the 19th Century but I’ll just take you back to the 1950s. Using population growth as one overarching indicator, it has just been getting worse over the decades. In the 1970s New Brunswick’s population growth approximated that of the country as a whole. Depending on who you talk to and how cynical you are there are several explanations for why population growth collapsed here in the 1980s, 1990s, flatlined in the 2000s and is slipping into outright decline now and forecasted to continue into the 2020s and 2030s.

The title of this blog is deliberate. When I got hired on at GNB 2+ years ago I was wooed in by the idea that I could implement all my great ideas about economic development. I’d be like Moses with the tablets coming down from the mountain. It didn’t quite work out like that. Don’t get me wrong. Many of my ideas – from the need to focus on specific opportunities, to the need to have a rigorous approach to ROI on economic development spending to the need to radically boost the population through immigration are reflected in the new economic growth plan and I had a hand in the crafting of a cross-departmental approach to economic development that didn’t exist before. But it’s clear to me that the provincial government is only one actor on the stage and because of our political system – democracy – it’s direction and focus is heavily influenced by the other actors.

I’m going to continue to ply my trade helping communities, industries and governments foster the conditions for growth and prosperity. I remain convinced that a weak, aging New Brunswick with stagnant economic growth and declining population will be no good for the people here and no good for the country as a whole. I’m not sure we will go over the cliff but I can see us stumbling along for the next 20-30 years doing the same old things and getting the same old results.

A lot of folks talk about inevitability. That Atlantic Canada is doomed by history, by geography, by culture, etc. to underperform but I’ve never bought that argument. If you look at the United States many of the states that have led the country for growth have the worst so-called fundamentals. You can’t tell me that Idaho, Nevada, Wyoming are somehow fundamentally better positioned than a place like New Brunswick.

A little introspection once in a while is good. Too much introspection can lead to paralysis.

I still think the fundamentals for a growth agenda are relatively easy to articulate. We need to find New Brunswick and Atlantic Canada’s place in the global economy. We need to attract a lot more people, investment and ideas. If I was Francis McGuire I’d fundamentally transform ACOA into the agency that positions Atlantic Canada in the world rather than provides banking services to small and medium sized businesses. I’d have multiple international offices (just like Quebec, Ontario, Alberta, BC have) working on trade, investment, talent attraction, institution-to-institution relationships, business-to-business linkages, etc. I’d put talent attraction on the same level as investment attraction or small business support. The vast resources aimed at trying to squeeze a little more economic juice out of the NB lemon I would reorient towards attracting more lemons (re: oops that may not be the best analogy, sorry about that). Instead of setting up all this startup incubation/acceleration infrastructure and then hoping a few NB entrepreneurs will stumble through the doors I’d go far and wide to attract some of the best minds with the best ideas to move here. We want to be a world leader in the Smart Grid? Let’s go around the world – to Spain, to Romania and to China and find those Phd students working on the coolest ideas and let’s woo them here to Shukla’s Energia Incubator at UNB.

We all caught up worried about the young people that leave our region. We use it as the excuse to not attract immigrants. This has been our fatal conceit. Between 2010 and 2016 the Canadian labour market has swelled with a crush of new immigrant workers- more than 830,000 – of which New Brunswick eeked out growth of 3,300 which was more than offset by the decline of New Brunswick born labour market participants.

And which province led the country in economic growth? The province that had the foresight a decade ago to dramatically boost its immigrant numbers.

Anyway, I come back to the prediction I made more than a decade ago. On our current path you can expect the federal government to set up a “Royal Commission on the Future of the Maritime Provinces” somewhere around 2026. It will be headed by an Octogenarian Frank McKenna who will conclude the region needs to amalgamate and radically centralize public services in a few urban areas. It will be the strategy to best manage the region’s decline.

I think there is still time to avoid the McKenna Octogenarian Royal Commission but I’m not sure the will is really here to get it done.

]]>http://davidwcampbell.com/2017/06/the-bonfire-of-my-vanities/feed/2Expanding Riverview’s role as a air traffic control centre (?)http://davidwcampbell.com/2017/05/expanding-riverviews-role-as-a-air-traffic-control-centre/
http://davidwcampbell.com/2017/05/expanding-riverviews-role-as-a-air-traffic-control-centre/#commentsSun, 28 May 2017 11:07:25 +0000http://davidwcampbell.com/?p=6750Continue reading →]]>For those of you unfamiliar with Riverview, New Brunswick, some of the nicest homes belong to the folks working at the NAVCAN Flight Information Region. There are five of these across Canada. Ever since I moved back to New Brunswick in the early 90s there have been rumblings of the potential closure of Riverview – it is supposedly the smallest of the five. Here is what NAVCAN says on its website about the Riverview centre:

“Moncton FIR is an ideal place to work – with reasonable travel to sites, a variety of equipment which keeps the job dynamic, and a great group of people who have a vested interest in your career.”

There was an excellent article in The Economist this week about the movement of control tower activity away from having one at each airport to centralized monitoring activity remotely. Norway apparently is consolidating a lot of activity in a small, northern centre that will remotely monitor airports across the country.

In Canada, ‘consolidation’ usually means closing places like Riverview and moving the work to a larger centre. We have seen it with hotdogs (Maple Leaf) as well as government services. There is no reason why ‘consolidation’ couldn’t mean closing facilities in large centres and moving the work to smaller centres – particularly for work that isn’t geographically sensitive – but this doesn’t seem to work out much.

Anyway, it would be interesting to understand what is going on in Canada – will control towers be closing in favour of remote monitoring? If so, could a place like Riverview be expanded to handle activity from across the country? Or will this be just another example of a national organization – public or private – think CN Shops – closing here and moving the work to Ontario or Quebec?

]]>http://davidwcampbell.com/2017/05/expanding-riverviews-role-as-a-air-traffic-control-centre/feed/0Nudging the invisible hand – just a tiny, little bit.http://davidwcampbell.com/2017/05/nudging-the-invisible-hand-just-a-tiny-little-bit/
http://davidwcampbell.com/2017/05/nudging-the-invisible-hand-just-a-tiny-little-bit/#commentsFri, 05 May 2017 09:51:20 +0000http://davidwcampbell.com/?p=6747Continue reading →]]>For those of you who think I’ve gone all Mariana Mazzucato on you and think government should become a market maker – relax, but I do believe government can be a market nudger.

As I have written about many times I am a big fan of markets. When working well they can be remarkable as arbiters of price, quality, supply and capital allocation. I’ve written whole articles on the ‘pizza’ market. It has small, medium and large firms. It has local, national and international firms. It has firms priced at the low end (Little Caesars) and the high end (Piatto in Moncton) and it has a wide range of specialities from the bland to the highly niched. It features easy of entry and exit. There are firms that make lots of profit and can accumulate wealth and there are firms that go out of business within months of opening. And there isn’t much government involvement beyond food safety and some control over access to certain inputs such as industrial cheese.

But the assumption that somehow all markets are infallible is just not correct. What I mean by this is that we kind of assume that if there is a market opportunity in a local area that enterprising entrepreneurs will be there to fill it. The reason there are no hot dog stands in Fredericton is that there is no demand for hot dog stands. The reason there is no river boat operating on the Saint John River (inside joke) is that there is no demand for a river boat. The reason there is no dentist office in Minto (I’m not sure about this) is that there is no market for dentistry in Minto.

I disagree and have come to the conclusion that one of the central roles of ‘economic development’ – whether practiced by governments, chambers of commerce, industry groups, etc. – should be to shed light on potential entrepreneurial opportunities. Not set up and run businesses. Not provide outsized subsidies to set up and run businesses. But to frame potential opportunities – particularly those with strategic value – and then make those opportunities known to entrepreneurs and business that could take advantage.

We do that a little already. Opportunities New Brunswick is out trying to convince national and international firms that there are ‘opportunities’ to set up in New Brunswick and take advantage of a competitive advantage such as the cost environment, geography, a natural resource, etc. but beyond that we do very little. Most of what we call economic development is helping existing firms – with grants, loans, etc.

For example, if a firm in Taymouth thinks it has a product that it can sell into international markets we will give it grants and loans (ONB, ACOA, CBDC, BDC, EDC, RDC, and other acronyms) to help it get into those markets. But we give very little thought or focus to where the entrepreneurs come from in the first place. That is up to the ‘free market’ – I’m told.

Now the usual retort to my argument here is that how can government be good at picking entrepreneurial opportunities? To many that is like fingernails on a chalkboard (Millennials – Google it). In fact, this is not exactly what I am proposing here.
Let me give you a concrete example. New Brunswick is now the second largest producer of wild blueberries in the world. We have made enormous progress on farm productivity – we have allocated a lot –more Crown land – and we have seen a large expansion in blueberry production to the point we have an oversupply and will be curtailing production.
As far as I can tell there has been significant effort to expand the number and scope of farmers but virtually no effort to foster other types of businesses in the sector – in the supply chain and in the use of the product (other than the attraction of a large scale freezing and storage capacity). Where are the startups? Where are the firms taking blueberries and transforming them in to value added products? Nutraceutical uses? Industrial uses? Where is the commercial kitchen to allow potential startups to test their blueberry-based food products? Where is the university research into the antioxidant properties of blueberries and the tech startups arising from that research? Are there ways to harness the properties of the blueberries as a natural sweetener?

In my view someone – some entity – should be at least shining the light on potential opportunities and exposing those opportunities to potential entrepreneurs. Think of it as a trade show for New Brunswick blueberry entrepreneurial opportunities.

Now, again, to many of you this is a bridge too far for government. This should be the role of private industry or at least industry groups. Maybe so. But where are they? There is a very strong public interest in New Brunswick developing an economic cluster around our blueberry sector. We have a microclimate and environment that is ideally suited to wild blueberry production – there are few locations in the world as attractive as New Brunswick. We can’t passively sit back and hope that entrepreneurs from far and wide will figure it out.

I would infuse this approach across our economic development – local, provincial and national. If Minto needs a dentist because everyone has to drive into Fredericton and pay the premium in time and money to do so – I would contact all the dentist offices in Fredericton and see which one would be interested in setting up a satellite office in Minto. Minto would get the economic benefit of that office and residents would have the convenience. Unless someone actually works on this it may not happen in a Darwin-like fashion.

]]>http://davidwcampbell.com/2017/05/nudging-the-invisible-hand-just-a-tiny-little-bit/feed/1India: Investment, exports and talent all in one package?http://davidwcampbell.com/2017/03/india-investment-exports-and-talent-all-in-one-package/
http://davidwcampbell.com/2017/03/india-investment-exports-and-talent-all-in-one-package/#commentsSun, 26 Mar 2017 11:07:37 +0000http://davidwcampbell.com/?p=6742Continue reading →]]>There are few countries that are the whole package. If a jurisdiction is looking to attract investment (or firms that want to invest there) it is normally richer countries such as the U.S. If a jurisdiction wants to develop export markets for its products and services it may not be the same target as investment markets (say potash for the Brazilian market – although that example is one that makes me swallow hard). Finally, if a jurisdiction wants to attract talent – workers or entrepreneurs – it may not be the same markets as either investment or export markets. For example, Romania, Morocco and the Philippines may be ideal markets for talent attraction but not necessarily investment or export market development.

India, it seems to me, provides the trifecta. Indian IT outsourcing firms are placing tens of thousands of workers from India into the United States using the H1B visa program. Now that program is under threat – at least at a high level making Canada look more attractive. Indian firms are also a significant source of investment (think AV Birla and its investment in NB forest products mills). Finally, Indian firms that potentially set up in New Brunswick wouldn’t be doing so for local markets – but as a location to develop export markets. We have spent decades trying to develop Asian export markets but to little avail.

But when AV bought two mills in New Brunswick exports to Asia rocketed by more than 8x. If Indian IT outsourcers set up here they too will significantly boost our export revenue.

The challenge, of course, is that many jurisdictions realize this so the competition for Indian talent and investment is substantial. Small jurisdictions need to figure out if they can find niches to exploit in highly competitive markets or whether they should focus on less lucrative but less competitive markets. NB has already attracted one small IT firm from eastern Europe – there may be many more looking to set up in North America but that are nervous about the US of A at this time.

But we need to give India the good ol’ college try. The opportunity is too great to pass up.

]]>http://davidwcampbell.com/2017/03/india-investment-exports-and-talent-all-in-one-package/feed/0New Brunswick: Nearly 1/5th into a New Centuryhttp://davidwcampbell.com/2017/03/new-brunswick-nearly-15th-into-a-new-century/
http://davidwcampbell.com/2017/03/new-brunswick-nearly-15th-into-a-new-century/#commentsSat, 18 Mar 2017 20:55:07 +0000http://davidwcampbell.com/?p=6734Continue reading →]]>As I get older I realize there actually isn’t much that old people have on the young. These days skills can be acquired at lightening speed, many young people have figured out the importance of networks in a way that most in my generation did not. There is one thing that age brings that is hard for the young – perspective. You can read about events all day long but that is not the same as living them. Characterizations of the ‘Moncton Miracle’ by the young today do not have the same texture as those served up by David Jonah or others that were actively involved at the front end in the 1980s.

Recently while cleaning out old files I came across a hard copy of this McKenna era report (New Brunswick at the Dawn of a New Century) on demography and how it would impact the province in the years ahead.

There are a few fun facts in this report. It states, for example, that the per capita costs for publicly funded health care in New Brunswick for those 85+ was a shocking $477 in 1995 – more than double (!) the overall per capita costs. According to the Bank of Canada inflation calculator $477 in 1995 would be the same as $713 in 2017. Guess how much the per capita costs for 85+ health care are today? Depending on your data source – around $12,000 per 85+ person. Don’t even think about projecting this growth rate out over the next 20 years or you will be immersed in a Richard Saillantian world of cliffs and cleavages.

But what is most striking is what is not said in this report. They set up a select committee of the Legislature – delve into the big issues – the global desire to moderate or reduce population, the fact that Canada will need 500,000 immigrants per year by 2030 – a target by the way we are well on the way to hitting nationally – all of the major drivers of New Brunswick’s demographics – and then virtually no recommendations – only vague statements about need to come up with innovative solutions, etc.

In the 1995 Throne Speech, McKenna stated “dramatic demographic changes are ahead, creating risks for the unprepared and opportunity for the far-sighted” and “New Brunswick will be ready for the twenty-first century.”

I can’t help thinking as my mother used to say “there is many a slip between the cup and the lip”.

]]>http://davidwcampbell.com/2017/03/new-brunswick-nearly-15th-into-a-new-century/feed/0The importance of skin in the gamehttp://davidwcampbell.com/2016/12/the-importance-of-skin-in-the-game/
http://davidwcampbell.com/2016/12/the-importance-of-skin-in-the-game/#commentsSat, 31 Dec 2016 13:09:56 +0000http://davidwcampbell.com/?p=6724Continue reading →]]>I’m not sure where this term, skin in the game, comes from – I won’t google it because I may not like its origin but I do like the concept. I think it applies to economic development here in New Brunswick. Nassim Taleb – the black swan guy – co-authored an excellent paper on the general theory of skin in the game back in 2013. I think he is coming out with a book on the subject soon.

New Brunswick has an economic development problem. It’s economy is growing very slowly (on average, 0.5% per year since 2008), employment is declining and investment is flat. Productivity remains a key challenge. Why does this matter? Can’t we just limp along as a province for the next 2-3 decades until we get beyond the Boomer demographic hump?

I’m not sure. The premise behind the idea of Canada is that rich provinces will cover the shortfall in poorer provinces and every Canadian will have good quality public services and public infrastructure at reasonably comparable levels of taxation. In an increasingly competitive world the ‘rich’ provinces (think Ontario) are facing their own heightened competition for investment, talent and ideas.

In my view, the best approach moving forward is for each province/region in Canada to buckle down and build an economic agenda that focuses on a substantial increase in the inward flow of migrants, high growth potential entrepreneurship and economic opportunities for which the region has a strong value proposition.

This brings me to the skin in the game concept as it relates to economic development. I believe that industry groups, municipalities, and other actors need to put skin in the game and work with the provincial and federal governments on the growth-focused economic agenda. It’s easy to blame government when things go wrong. And government needs to shoulder some of the blame. But if we really want industries and communities that thrive, we need a collaborative approach where each stakeholder plays a role based on its strengths. Government has things it does reasonably well and others that it doesn’t. This vision of government as a bank for industry that gives cash and then ‘gets out of the way’ is not going to get it done.

So, we need municipalities, industry groups, universities, not-for-profits, etc. to put skin in the game. Some of the most inspiring stories I have heard in the past year have been community-level efforts to foster economic development. St. Stephen comes to mind with its wildly ambitious goal of adding 1,000 people to its population within a decade. Transport yourself to 2025 to see how St. Stephen envisions its future.

The provincial government is trying to seriously evolve how it approaches economic development putting much more emphasis on the factors that drive long term economic success – the talent pipeline, infrastructure, innovation, focusing on areas of strength and we need our partners to step up to the plate too. We should be well beyond the old NB value proposition of lower costs and lots of available young workers (the value proposition circa 1990). We now need to be a place (actually many places) where entrepreneurs and companies want to be because there is a broad value proposition for them to be here.

]]>http://davidwcampbell.com/2016/12/the-importance-of-skin-in-the-game/feed/1Ensuring there are workers across the labour market spectrumhttp://davidwcampbell.com/2016/10/ensuring-there-are-workers-across-the-labour-market-spectrum/
http://davidwcampbell.com/2016/10/ensuring-there-are-workers-across-the-labour-market-spectrum/#commentsSat, 08 Oct 2016 10:58:51 +0000http://davidwcampbell.com/?p=6719Continue reading →]]>The new immigration pilot worked out with the feds is unique because the Atl. provinces can now attract needed workers across the labour market spectrum – from fish plant workers to engineers. I have had more than a few people question why we would want to attract immigrants into sectors not paying particularly high wages. The logic goes that the firms struggling to find workers should pay higher wages or become more productive. One economist said that the “only way” to reduce our 10% unemployment rate would be for firms to raise their wages to a level that would attract in workers.

In theory there may be some logic to this but in practice there are many other factors at play. Firms in export industries compete in global markets and therefore cost competition is set globally. If input costs increase too much in one location and not another it puts the former at a competitive disadvantage. Productivity is a good thing for sure but many firms still require lots of workers.

Look at the growth in below average wage jobs across Canada between July 2008 and July 2016. This data is taken from the Survey of Employment, Payrolls and Hours (SEPH). The average wage includes overtime. Across the country jobs in below average wages have increased by 10.5%. In New Brunswick below average wage (occupations) jobs decreased by 0.1% – and if you back out health care and social assistance (which, yes, is a slightly below average wage sector because of the many support occupations in there – nursing home care workers, child care workers, etc.), the number has dropped by 7.3%. When you look deeper you will see that many of the high wage occupations are dependent on the state of the local economy (doctors, lawyers, architects, electricians, etc.) so not addressing labour shortages in below average wage occupations drags down the potential of high wage jobs in the economy.

The compounding challenge here is that young New Brunswickers increasingly don’t want to work in ‘lower wage’ occupations. Between 2008 and 2014 there was a 15% decline in the number of persons under the age of 35 declaring annual income of $35,000 or less – a 3x times larger drop than Canada as a whole . At first glance you might say that is a good thing but look at the following graph. Look at Alberta. The strongest economy over the period actually saw growth in the number of young people earning less than $35,000 per year. Why? Because there are lots of jobs in any economy – for better or worse – that pay below average wages. A strong and sustainable economy is one where there are workers to fill jobs across the spectrum – with a healthy upward pressure on wages over time.

If you look at the case of Manitoba it has witnessed record numbers of young immigrants coming in to fill jobs in food manufacturing, back offices and other service industry jobs (it’s no accident they are second only behind Alberta in the chart above). The wage levels aren’t particularly high but they are an order of magnitude higher than what the immigrants were earning before.

]]>http://davidwcampbell.com/2016/10/ensuring-there-are-workers-across-the-labour-market-spectrum/feed/0Millennial self-employment in export-oriented industries: An NB challengehttp://davidwcampbell.com/2016/09/millennial-self-employment-in-export-oriented-industries-an-nb-challenge/
http://davidwcampbell.com/2016/09/millennial-self-employment-in-export-oriented-industries-an-nb-challenge/#commentsTue, 27 Sep 2016 10:38:19 +0000http://davidwcampbell.com/?p=6715Continue reading →]]>I have been thinking a lot lately about entrepreneurship among Millennials. If we want a vibrant and durable economy moving forward we need the next generation of ambitious and growth-focused entrepreneurs to step up. Over the past decade we have witnessed a substantial boost to the government supported services meant to support entrepreneurs – and we have seen an expansion of the private capital available to them. Governments have invested millions in support and expanded the small business investor tax credit program to encourage more investment in startups.

Unfortunately the most recent data we have is from the 2011 NHS but that paints a rather bleak picture of self-employment among Millennials in New Brunswick. The chart below tells the story. It is an index where the country’s workforce as a whole is represented by 1.00. Anything above the line means NB has a higher share and anything below the line means we have a lower share compared to the national workforce. For self-employment in occupations that are only focused on the local market (Lawyers, doctors, vets, accountants), we have a higher share of young people that are self-employed compared to the national workforce but among those occupations that tend to have high concentrations in export-focused industries we are well below the line. Across the country 8.5% of IT workers are self-employed. In New Brunswick it is 2.3%.

In the manufacturing sector (not depicted in the chart) only 30 young people out of the 5,200 working in the sector are self-employed. Across the country there are 4x as many young people in the manufacturing sector classified as self-employed.

Hopefully the numbers have improved since 2011. However, Dr. Haan’s statistic looms large in the background. Those who leave the province are twice as likely to own a business as those that stay.

]]>http://davidwcampbell.com/2016/09/millennial-self-employment-in-export-oriented-industries-an-nb-challenge/feed/0New Brunswick’s missing 35 to 44 year olds: A lesson in demographicshttp://davidwcampbell.com/2016/09/new-brunswicks-missing-35-to-44-year-olds-a-lesson-in-demographics/
http://davidwcampbell.com/2016/09/new-brunswicks-missing-35-to-44-year-olds-a-lesson-in-demographics/#commentsFri, 09 Sep 2016 16:07:47 +0000http://davidwcampbell.com/?p=6711Continue reading →]]>There is a view that youth out-migration is something that can be fixed – like you would fix an old car. The reality is much more nuanced. The following chart shows the New Brunswick population by age cohort relative to the national population. As an example, in 1971 New Brunswick had 8.5% more 0 to 4 year olds in its population (as a share of the total) than Canada as a whole and 3 percent fewer 50 to 54 year olds. If you look at the graphic you will see that not much has changed in the last four decades. New Brunswick still has a higher share of its population under the age of 24 and a higher share of its population over the age of 60.

The population overall has significantly moved to the right – i.e. both NB and Canada are much older now and it has grown much faster across Canada – but the mix in distribution has not changed much.

In 1971 New Brunswick’s largest population gap with Canada as a whole was in the 35 to 44 year old age cohort. In 2015 it remains this cohort and remarkably almost by the same exact percentage share. In 1971 we had 15 percent fewer 35 to 44 year olds in the population than Canada as a whole and in 2015 we had – you guessed it – 15 percent fewer 35 to 44 year olds in the population. 44 years later.

The reality is that this phenomenon is similar in other small provinces and U.S. states. Small jurisdictions end up losing a lot of young people to the large urban centres. The small jurisdictions – such as Manitoba and Saskatchewan – are those that are seeking a significant of inward migration to counter the outward effect.

That may seem counter-intuitive to some people. Why try to bring in younger immigrants when your young sons and daughters are leaving? We have 40+ years of making that same argument. We don’t need immigrants because we have youth out-migration. How has that worked out so far?

As I have pointed out many times before – Toronto has a high net outward inter and intra provincial migration rate. They make up for the loss with 95,000 mostly younger immigrants every year.

No matter how hard it is to get our heads around it is my view that a big boost in immigration should actual lead to more jobs for young, Canada born New Brunswickers. Many of the new immigrants will fill positions that are not being filled now and that should boost output and create more jobs in the local economy.

You would think that 40 years of data would lead to a little new thinking.

]]>http://davidwcampbell.com/2016/09/new-brunswicks-missing-35-to-44-year-olds-a-lesson-in-demographics/feed/2New Brunswick’s $250,000 problemhttp://davidwcampbell.com/2016/07/new-brunswicks-250000-problem/
http://davidwcampbell.com/2016/07/new-brunswicks-250000-problem/#commentsFri, 15 Jul 2016 11:31:48 +0000http://davidwcampbell.com/?p=6708Continue reading →]]>New Brunswick has 59% fewer people who earn $200,000 per year and 63% fewer people who earn $250,00 per year compared to Canada as a whole.

To put that into some kind of context, you would have to look far and wide to find any major social, demographic or economic indicator where New Brunswick had a 60% spread with the rest of Canada. Not literacy, education, poverty or health outcomes. Not median income or any other main economic indicator.

But when it comes to ‘high’ income earners we have a huge gap. And the gap is widening at least at the highest level. In the past five years the national growth rate of those earning $250,000 was 50% faster than New Brunswick.

Does this matter? Well, I think it does. By my estimate just getting to the national average for higher income earners would add some $200 million in provincial government tax revenues each year. And that is grossly understated because it doesn’t account for other sources of tax revenue that would be derived from the economic activity generated by those high income earners (I only looked at the direct taxes off the additional personal income). In other words it pushes the tax burden down the income pyramid.

Now let me be clear. If the price to get more higher income earners means less income for those lower in the income pyramid (i.e. creating more inequality) – that is not acceptable. But I am talking about generating relatively high incomes from creating new wealth from entrepreneurial activity, risk taking and hard work.

How do we do that? We need more ambitious entrepreneurs looking to build markets outside New Brunswick and we need world class companies willing to step outside their comfort zone and take risk.

]]>http://davidwcampbell.com/2016/07/new-brunswicks-250000-problem/feed/1Energy and mining export values down, gypsum, aquaculture and peanut butter uphttp://davidwcampbell.com/2016/06/energy-and-mining-export-values-down-gypsum-aquaculture-and-peanut-butter-up/
http://davidwcampbell.com/2016/06/energy-and-mining-export-values-down-gypsum-aquaculture-and-peanut-butter-up/#commentsSun, 05 Jun 2016 11:11:36 +0000http://davidwcampbell.com/?p=6703Continue reading →]]>A quick look at the international export data for the first four months of 2016 reveals that the value of energy-related exports is down significantly this year so far. The total value of refined petroleum exports, gas exports (mostly LNG) and NB Power exports is down by $869 million this year so far. You have to be careful with this, however, as the lost ‘value from refined petroleum exports could be upstream as the value of oil and gas imports is down by $636 million during the same period. The decline in Canaport exports to New England is likely due to the mild winter.

Other decliners including non-metallic minerals (potash) – no surprise there – and the rest of the declines are quite marginal and could be due more to currency fluctuations than production declines.

On the winners side, Gypsum product exports are up (but in absolute terms by a fairly limited amount). Aquaculture exports are up strongly by $35 million in the first four months. Peanut butter exports are rolling along (snack food). The value of seafood exports is up by $30 million. The value of pulp million exports are up by $31 million.

]]>http://davidwcampbell.com/2016/06/energy-and-mining-export-values-down-gypsum-aquaculture-and-peanut-butter-up/feed/0Learning from Leicester Cityhttp://davidwcampbell.com/2016/05/learning-from-leicester-city/
http://davidwcampbell.com/2016/05/learning-from-leicester-city/#commentsThu, 12 May 2016 13:01:22 +0000http://davidwcampbell.com/?p=6699Continue reading →]]>I think there are lessons to be drawn from the Leicester City Foxes who recently won the 2015-16 English Premier League. The Foxes were 5,000 to 1 to win on the season’s opening day.

I can’t help but take a little jab at my Edmonton Oilers – a team I have followed since they joined the NHL in 1979 (I was 12 at the time). In many country professional sports leagues (like the EPL) whole teams can be demoted if they don’t play good enough to remain in the top league. I suspect if the NHL had that approach (i.e. the Oilers as a team would get demoted to a lower league) you would have far better hockey because teams would be extra vigilant to make sure they put a quality product on the ice. These days teams like Toronto and Edmonton can languish in obscurity and still turn a nice profit for their owners (in fairness I have no idea if Edmonton has been profitable).

One of New Brunswick’s biggest challenges relates to how a small jurisdiction positions itself in a world that is more open and global than ever before. Capital, talent and ideas are more mobile than at any time in our history (at least until the Trump Express hits the Whitehouse) and New Brunswick risks being left behind.

Leicester City shows that an innovative approach, a little luck as well as a version of the Tortoise and the Hare story can help elevate underdogs.

I am a little concerned that New Brunswick is too under the radar from a national economy perspective. If Ontario had our province’s economic performance over the past eight years it would be an international issue. When Alberta’s economic growth fell to zero (and slightly below), the nation’s media was awash in stories. When NB has zero growth for seven straight years (on average) no one notices or they shrug their shoulders and say “that’s just New Brunswick”.

Why this matters is that we need the federal government to be concerned about NB’s economic trajectory and help where it can – in areas such as immigration, our share of national innovation funding, helping promote NB around the world using its global network of trade and investment officers, etc.

We need to attract national and international investment – like we have in the past – if we are too under the radar that becomes more difficult.

We need to attract a lot of talent in the coming years. That too requires a focused effort.

The Economist magazine, after several articles extolling the virtues of Leicester City and drawing much broader lessons for the economy – has piece concluding that “underdogs are overrated”.

A YouTube channel that describes itself as “dedicated to Brazilians wish to one day live in Canada” recently featured an hour and 12 minute conversation with Sergio and Kaísa who recently moved to Moncton where Sergio is taking a course at the NBCC. They would like to stay in Moncton after he finishes his course and the conversation was very positive on New Brunswick and Moncton – both Kaísa and Sergio could see themselves building their careers here.

The YouTube conversation has been viewed over 2,000 times (sorry, folks, its 100% in Portuguese – although they do talk about a new kind of Chiac – their word not mine) that is half English, half Portuguese.

Since Sergio and Kaísa’s free promotional plug for New Brunswick the group’s Facebook site in Moncton has been pinged by numerous Brazilians asking more about New Brunswick and expressing an interest in moving here.

I think it would be kind of cool to attract more young Brazilians here – New Brunswick could use a little more samba.

]]>http://davidwcampbell.com/2016/03/brasileiros-em-new-brunswick-will-a-wave-of-brazilians-help-rebalance-our-demographics/feed/1Growth in the provincial workforce and GDP by Premierhttp://davidwcampbell.com/2016/03/growth-in-the-provincial-workforce-and-gdp-by-premier/
http://davidwcampbell.com/2016/03/growth-in-the-provincial-workforce-and-gdp-by-premier/#commentsFri, 25 Mar 2016 22:30:15 +0000http://davidwcampbell.com/?p=6694Continue reading →]]>Between 1987 and 1997, the years when Frank McKenna was Premier the provincial workforce expanded by 32,000 people and total employment increased by 29,800. Real GDP grew by 11.3%.

Between 1999 and 2006, when Bernard Lord was Premier, the workforce expanded by 21,400 and total employment grew by 24,700. Real GDP grew by 17.8%.

Between 2006 and 2010 when Shawn Graham was Premier the provincial workforce expanded by 10,400 and total employment by 7,700. Real GDP grew by 2.1%.

Between 2010 and 2014, during Premier Alward’s term, the provincial workforce shrunk by 1,300 and total employment dropped by 4,200. Real GDP declined by 0.7%.

Between 2014 and 2015, the provincial workforce has declined by 2,800 and total employment is down 2,100. We don’t know the final tally for 2015 GDP yet – we are expecting a marginally positive number but not outstanding.

I wonder how many people out there still don’t see a connection between the trajectory of the workforce and economic growth?

By the way, if I put up the national numbers you would see roughly the same correlation – the only difference is the workforce nationally has been growing rapidly in line roughly with GDP growth. Between 2008 and 2015, New Brunswick’s workforce declined by 4,100. The national workforce increased over the same timeframe by 1.16 million.

]]>http://davidwcampbell.com/2016/03/growth-in-the-provincial-workforce-and-gdp-by-premier/feed/1Are women or men more at risk from the coming automated economy?http://davidwcampbell.com/2016/02/are-women-or-men-more-at-risk-from-the-coming-automated-economy/
http://davidwcampbell.com/2016/02/are-women-or-men-more-at-risk-from-the-coming-automated-economy/#commentsSat, 06 Feb 2016 01:51:57 +0000http://davidwcampbell.com/?p=6684Continue reading →]]>After a Davos conversation there have been a number of stories recently about which gender is most ask risk from the coming automated economy – driverless cars, robots, etc. It’s an interesting conversation. I took at look at the occupational differences between women and men in New Brunswick to add a little local context to this debate. Most of the findings are not overly surprising but there are a few eyebrow raisers.

For a methodology, I took the share of employment for males and females and then compared the the two with male employment as the base (= 1.00). Simply, anything less than 1.00 means that the female workforce has a lower share compared to men and anything above means they have a higher share.

The table below shows the highest level summary for the top level NOC codes 1-9. As would be expected, females have fewer people in management relative to men (36% less) but they have 2.6 times as many working in business, finance and admin occupations. There are 4.4 times as many females working in health occupations compared to men. On the opposite end of the spectrum, there are 70% fewer females working in natural and applied sciences occupations, almost none in trades and transportation, very few in natural resources occupations and less than half – relatively speaking – in manufacturing occupations.

The more detailed breakdown (link below) reveals some interesting findings at the more granular level. There are significantly more females in senior management roles in health, education and social services compared to men; 33% more financial managers, 95% more HR managers, 43% more banking, credit and investment managers, and three times as many managers in health care.

Females are more heavily employed in administrative occupations (three times as many compared to men). The main outlier – there are 61 times as many females working as medical admin. assistants than men.

Women kick arse in health care – except for NOC 311 Physicians, dentists and veterinarians – where there are 27% fewer females than males. However, there are 35% more female veterinarians, more optometrists, 73% more pharmacists, nearly six times as many females in therapy-based occupations, 5.5 times as many in med. tech occupations.

There are slightly fewer female university professors (21% fewer) but more college instructors (+27%). There are more than 3 times as many teachers.

There are 22% fewer female lawyers compared to men and 70% fewer police officers.

There are 66% more female bartenders – who knew?

There are very few women working in the trades and transportation occupations. 96% fewer working as machinists or related workers. 98% fewer plumbers, 98% fewer carpenters, 96% fewer heavy equipment operators.

There are far fewer females working in virtually all natural resource-based occupations except nursery workers (67% more) and harvesting labourers (83% more). More women work in fish plant occupations (12% more) and labourers in fish and seafood processing (75% more).

]]>http://davidwcampbell.com/2016/02/are-women-or-men-more-at-risk-from-the-coming-automated-economy/feed/2Redux: Does labour follow capital or vice versa?http://davidwcampbell.com/2016/01/redux-does-labour-follow-capital-or-vice-versa/
http://davidwcampbell.com/2016/01/redux-does-labour-follow-capital-or-vice-versa/#commentsMon, 25 Jan 2016 10:51:08 +0000http://davidwcampbell.com/?p=6678Continue reading →]]>Should New Brunswick focus more on trying to attract jobs or on growing the population?An interesting new study out of Indiana has important implications for economic development in New Brunswick.

The researchers looked at whether or not job growth (efforts to foster more jobs) lead to population growth or did having a growing population foster new job growth.

They found that “in the 1970s people followed jobs, but by the 2000s they had stopped.” If the economy was going to grow the workers had to be in place. In other words, the researchers conclude that communities need to be great places to live and attract people and the jobs will come rather than trying to attract jobs to places with tight and shrinking labour markets.

That sounds a lot like New Brunswick these days.

I have been saying all along that there are some jobs that will attract labour. Think Fort McMurray. Sectors such as mining tend to be a magnet for workers. But most industries are not like that. If there isn’t a pool of labour, over time investment and jobs will decline. I would not say this is a universal fact but for places such New Brunswick (and apparently Indiana) this is the case.

The study goes further and suggests the tax incentives used to lure jobs to the state were not well spent and the money should have been used to improve the quality of place and boost population.

I wouldn’t be as stark on this point.

I still believe there is an important role for communities and governments to expose firms to potential investment opportunities in their areas. For example, if a small community has enough local demand for a dentist and there are not a pile of dentists lining up to come, the community should build a business case and use it to convince a dentist to locate there. Likewise if a province has opportunities in shellfish aquaculture, mining, blueberries, etc. it should package and promote those opportunities to investors. If it has gateway infrastructure – roads, ports, airports with opportunities – it should promote these opportunities to investors. If it has low cost energy it should promote this benefit to industry.

If other jurisdictions are offering tax breaks or other forms of subsidy, we may well need to play some version of that game but I believe if we are ‘selling’ real opportunities with tangible value to investors, incentives will be less important.

The idea of trying to lure firms to New Brunswick with cash incentives even as the labour market is shrinking is increasingly problematic. Even if the firms move in they may take workers from existing employers who will then not be able to fill the vacancies.

New Brunswick needs to focus on intentionally growing its population – it’s working age population. This is foundational to ensuring investment and sustained GDP growth is in our future.

]]>http://davidwcampbell.com/2016/01/redux-does-labour-follow-capital-or-vice-versa/feed/2Manitoba and immigration: An interesting case studyhttp://davidwcampbell.com/2016/01/manitoba-and-immigration-an-interesting-case-study/
http://davidwcampbell.com/2016/01/manitoba-and-immigration-an-interesting-case-study/#commentsSun, 17 Jan 2016 10:56:07 +0000http://davidwcampbell.com/?p=6671Continue reading →]]>The Manitoba example is an interesting one for us to consider as we think more deeply about immigration and the labour market. Even though Manitoba has no oil and gas industry and only a fairly small mining sector (less that 3% of total GDP) its economy grew robustly between 2006 and 2014. Not to the level of Saskatchewan or Alberta mind you but still the size of the economy (real GDP) swelled by 20%. New Brunswick, by contrast, saw its total economy grow by only 2% over the same period.

What is interesting is the drivers of economic growth. In Manitoba, manufacturing GDP increased by 14% while decreasing 11% in New Brunswick. Transportation and warehousing GDP up by 12% in Manitoba but down 3% in New Brunswick. The administration and support services sector (where many contact centre jobs are classified) grew its GDP by 8% in Manitoba while declining by 7% in New Brunswick.

If you look at the ‘public sectors’ in comparison to overall GDP growth you see an interesting trend too. Health care GDP and public administration GDP grew strongly in Manitoba but less than the rate of overall economic growth. In New Brunswick, by contrast, health care GDP grew five times faster than overall GDP and public administration GDP grew six times.

But what is really interesting is the correlation between growing industries and immigration. Manitoba, a province only slightly larger than New Brunswick, attracted more than 8 times as many immigrants between 2001 and 2011 (defined as those living in the province in 2011 that arrived in Canada between 2001 and 2011).

But when it comes to the occupations that support export-oriented industries, the multiples go through the roof. Of the more than 18,000 New Brunswickers who worked in manufacturing-related occupations (NOC 9) in 2011, only 175 were recent immigrants (0.9%). In Manitoba, it was 5,515 (one in five of every workers). Manitoba attracted 31.5 times as many workers in NOC 9 compared to New Brunswick over the period.

It’s clear that Manitoba has been attracting immigrants for years to support economic growth.

One final point. Between 2001 and 2011, Manitoba’s employed workforce expanded by 62,000 people. 46,000 of the workers were recent immigrants.

]]>http://davidwcampbell.com/2016/01/manitoba-and-immigration-an-interesting-case-study/feed/0The size of NB’s workforce is smaller now than back in 2008. Only province to shrink.http://davidwcampbell.com/2016/01/the-size-of-nbs-workforce-is-smaller-now-than-back-in-2008-only-province-to-shrink/
http://davidwcampbell.com/2016/01/the-size-of-nbs-workforce-is-smaller-now-than-back-in-2008-only-province-to-shrink/#commentsWed, 13 Jan 2016 11:43:42 +0000http://davidwcampbell.com/?p=6668Continue reading →]]>New Brunswick saw an uptick in job creation in the last few months on 2015 and an overall real GDP growth rate (the final number is not in) of likely something above one percent. That may not seem like much but compared to the average rate of zero since 2008 that is a good step forward.

A lot of folks – me included – now believe the labour market is becoming the biggest drag on GDP growth potential in New Brunswick. As you can see from the chart below we are the only province in Canada that has seen its labour force shrink since 2008. Across Canada the number of people working or looking for work has increased by 1.16 million people. In New Brunswick, it has shrunk by 4,000.

Growth/decline in the size of the labour force (% change 2008-2015)

Source: Statistics Canada CANSIM Table 282-0002.

There is a fairly strong correlation actually between labour force growth since 2008 and GDP growth. NB has faired the worst among the provinces. Nova Scotia has been only a little better and PEI has actually had the best GDP growth rate among the four Atlantic Provinces along with its 5.7% increase in the labour force.

How do we grow the labour force? Either by encouraging more NBers to join or by attracting folks from outside the province or country to come in. The labour force participation rate (the percentage of adults that are either looking for work or working) has actually gone down from 2008 to 2015. This is mostly a function of age. Only 11 percent of folks over the age of 65 are in the labour market (participating) and while that is up from 6.5% in 2008 there is some question about how many more in this age group will join the labour market.

Among those in the prime age group 25-54, 87% are in the labour market (in 2015). There is not likely much more opportunity to expand that group.

Expanding the labour market will be very important if we are to get the economy moving in the right direction.

]]>http://davidwcampbell.com/2016/01/the-size-of-nbs-workforce-is-smaller-now-than-back-in-2008-only-province-to-shrink/feed/1The importance of international investment into New Brunswickhttp://davidwcampbell.com/2015/12/the-importance-of-international-investment-into-new-brunswick/
http://davidwcampbell.com/2015/12/the-importance-of-international-investment-into-new-brunswick/#commentsWed, 30 Dec 2015 18:35:18 +0000http://davidwcampbell.com/?p=6659Continue reading →]]>Long time readers of this blog will know of my focus on positive investment flows as the underlying foundation for economic development. Because we are a small province, etc. most of the savings accumulated in New Brunswick flows out of the province to fund economic development elsewhere. If you think about all the public pension monies (provincial and national) that are collected each year in New Brunswick they mostly flow outward for investment elsewhere and then flow back as needed to meet pension obligations. The Canada Pension Plan, as one example, is investing in toll highways in Australia. This also applies to private savings. If you look at where your RRSPs are invested you will find very little if any investment in your home province with the exception of some indirect investment (i.e. if you have shares in a bank and that bank has branches in New Brunswick).

I’m not complaining about the outward investment flow. Just like people and ideas – the global mobility of capital is now easier and safer than ever. It just puts an onus on us to ensure there is more than enough capital flowing back into New Brunswick in the form of investment in our firms and in economic projects across the province.

This investment can come in many forms. Like the CPP example above, it can involve investors putting money into low risk publicly back infrastructure projects but more importantly it needs to flow into firms and into greenfield multinational investments in plant, equipment and IP in New Brunswick. Firms investing in the mining sector, manufacturing, professional services, IT, contact centres, etc. that are based on export markets (Canada and international) boost employment, GDP and tax revenue.

New Brunswick needs more of this investment. While the interprovincial foreign investment flow data is very limited, we have good data at a national level. Across Canada, foreign owned companies have been pumping in new investment, expanding employment and growing their footprint. According to Statistics Canada, from 2010 to 2013, foreign majority-owned affiliates in Canada added more than 150,000 net new jobs between 2010 and 2013 including 20,000 in the mining sector (which has likely retrenched some since 2013), manufacturing (18,500), wholesale trade (26,000), professional services (20,500), administrative and support services (11,500) and accommodation and food services (23,000). The figure below shows the percentage change in total employment by 2 digit NAICS code.

While we don’t have the NB data, it is fair to say that multinational investment is not rushing into the province these days. The wholesale trade industry – adding 26,000 jobs from foreign majority-owned affiliates across Canada – has been shrinking in New Brunswick. Manufacturing investment is way down. Mining GDP has been cut dramatically. Even ICT GDP has been relatively flat in recent years.

So how do we encourage national and international investment? Well, it can come through greenfield investment (i.e. a firm comes here and sets up a new operation to service national or international markets) or it can come through investments in NB firms (equity stakes, outright acquisitions, etc.) which connect the NB firms into global supply chains and helps build international markets. According to Statistics Canada, foreign majority-owned affiliates across Canada account for more than 50% of international merchandise exports. While I can’t give you the NB share it is likely in the 10% range.

Why would international firms want to invest here? We need to have a value proposition for investment.

Below is the chart I used in my presentation earlier this week to make the case that we can’t use outward migration of New Brunswickers as a reason not to attract immigrants. If you look at the number of people that move into Greater Toronto each year and subtract the number that leave – you get a negative 23,000 in an average year between 2002 and 2014 (a long sample size). That is a negative inter and intraprovincial migration rate of 428 per 100,000 people living in the community

If you run the same numbers for New Brunswick over the same period you get a negative migration rate with the rest of Canada of 208 per 100,000. On a net basis, Toronto loses twice as many people each year than New Brunswick to migration elsewhere in Canada.

You don’t hear Torontoians lamenting the loss of their young people to other jurisdictions. There are no front page stories in the Globe and Mail of the tragedy of outward migration from Toronto. No laments from the Mayor of Toronto. No financial programs targeting young people to keep them at home.

Most people understand there are myriad of reasons why people move to and from Toronto. Besides, over that same period, Toronto attracted an average of 92,500 immigrants per year – 4 times as many as were lost through interprovincial migration. If New Brunswick had the same ratio of immigrant inflow to outward migration within Canada as Toronto, it would mean 6,300 immigrants flowing into New Brunswick per year.

I’m not suggesting we shouldn’t try and keep young people here. I’m a big supporter of experiential learning, apprenticeships, co-op education and doing a better job of exposing New Brunswickers to the jobs available here and now in the province. For example, I understand it is getting harder and harder to recruit loggers. I suspect a lot of New Brunswickers might find that an interesting career if they gave it a long hard look. You work in nature, earn good money and work hard for a living. But I suspect there aren’t many guidance counselors pitching ‘logger’ to high school students.

But at the end of the day people are more mobile than ever before and I don’t think we should spend too much time lamenting their loss. Many come back eventually and as I have said before many of the most interesting people I meet in New Brunswick have spend a large block of time outside the province (my colleague Susan Holt is a perfect example of this).

The overriding objective is to ensure there is enough labour to meet the demand in New Brunswick. In the last week alone I have heard about a laundry service in Saint John, a manufacturer in northern NB, a firm looking to hire loggers in central NB and a restaurant in northwestern NB that all can’t find workers.

]]>http://davidwcampbell.com/2015/12/the-great-toronto-out-migration-problem/feed/1Is self-employment a bad thing or a potential boon for New Brunswick?http://davidwcampbell.com/2015/10/is-self-employment-a-bad-thing-or-a-potential-boon-for-new-brunswick/
http://davidwcampbell.com/2015/10/is-self-employment-a-bad-thing-or-a-potential-boon-for-new-brunswick/#commentsSun, 25 Oct 2015 12:30:23 +0000http://davidwcampbell.com/?p=6647Continue reading →]]>There was an interesting article in the Economist magazine this week about the rise of self-employment in Britain and the conclusion by economists that this is basically a bad thing. This runs somewhat counter to the “start-up” narrative that has become all the rage. We want people to “start their own businesses” but we think self-employment is a bad thing?

Of course these are two different concepts – in theory. The sexy start-up is an attempt to build a business based on a novel idea or niche market opportunity. Its goal is to create new wealth. Most self-employment is meant as a source of income and in many cases – think folks who sell stuff at the farmers’ markets – it is purposely meant to be a part time gig.

First, here are the numbers for New Brunswick. The average income from ‘self-employment’ (as derived in Statistics Canada Neighbourhood Income Survey) in New Brunswick is $13,072 per person reporting self-employment income. Remember on this survey a person can be reporting both wages and salary income (day job) and self-employment income (farmers’ market). Nevertheless, the spread between the two sources of income is substantial. In 2000, the average self-employment income was 53% below wages and salary income. By 2013 that gap had swelled to 65%. Again, this is hardly apples-to-apples as lots of income derived through self-employment may not be reported and as mentioned above the type and duration of the work is likely much less.

It is also important to point out the spreads between self-employment and wage income across Canada are similar to New Brunswick (64% in 2013) so this is not just New Brunswick – but on the surface it would seem the economists are right.

However, I think we need to reconsider ‘self-employment’ particularly as most economists are predicting a sharp rise in ‘contractor’ workers (think Uber and Shopify) in the coming year in line with the growing number of Internet-based work to worker matching services.
New Brunswick can sit back and do nothing or we can try and get in front of this thing to benefit New Brunswickers.

Since 2000, the number of persons reporting self-employment income in New Brunswick is actually down by six percent while rising by 12 percent across Canada.

So here’s the deal. New Brunswick has pockets of high unemployment around the province and dozens of communities that desperately do not want their people to leave. Why can’t self-employment fill the gap? I’m not talking about self-employment based on local markets but based on external markets. There are dozens of firms right now looking for workers to do the job from home (or it could be from small office environments set up in small towns). These are mostly full time jobs and that offer fairly good wages (someone posted that the Shopify jobs are starting around $40,000/year).

]]>http://davidwcampbell.com/2015/10/is-self-employment-a-bad-thing-or-a-potential-boon-for-new-brunswick/feed/3Immigration as a driver of economic growthhttp://davidwcampbell.com/2015/08/immigration-as-a-driver-of-economic-growth/
http://davidwcampbell.com/2015/08/immigration-as-a-driver-of-economic-growth/#commentsWed, 26 Aug 2015 14:53:59 +0000http://davidwcampbell.com/?p=6640Continue reading →]]>I keep hearing folks ask the question “how come we need more immigrants when we have high unemployment and young people moving out west for jobs”? The answer to this question is one of the keys to us getting our economy back on track.

Most of us will not remember the last time there was a real, sustained immigration wave into New Brunswick because it was around the middle of the 19th Century. We had a little spike right after WW2 as war brides were brought over and other immigrants were still trying to leave Europe. But that quickly dropped down to levels well below the average for the country as a whole. We had a little spike in immigration in the early 1970s (an average of nearly 2000 per year between 1972-1976) which worked out to a rate of approximately 250 per 100,000 population (still well below the country as a whole). Then we dropped right back down to less than 100 immigrants per 100,000 and stayed there for more than 20 years – even as immigration into Canada remained at a steady and even growing pace by the 1990s.

If you are of a certain age you may remember the product of that mini-wave in the early 1970s. Some of those immigrants ended up working in government, some started successful businesses and others set up successful farming operations.

Now we had relatively high unemployment rates in the early 1970s. We also had young people “goin’ down the road” to find work in Toronto. We also had a wave of young people joining the workforce every year. Yet we still allowed in immigrants and many of them stayed and are here today.

In 2015 we have relatively high unemployment (although low by the standards of the mid 1970s) and we have young people going down the road. What we don’t have is a wave of young people joining the workforce every year. In fact, the young workforce is shrinking and has been for years.

Labour and capital are the two main drivers of economic growth. For most industries capital follows labour (think ICT). For a discrete number of industries labour follows capital (think Fort McMurray). If you think about many of New Brunswick’s key industries – from sawmills to fish plants to manufacturing to contact centres – if the labour pool dries up – so will the capital.

So, immigration becomes key to our economic renewal. Not necessarily Phds or highly skilled labour (although we will need some of that) – we need labour to fill the needs of industry – across the wage and skill spectrum. And, by the way, not just to fill the needs of existing industry but we also want to grow the economy and employment base of the province.

The next time someone tells you we don’t need more immigration, you now have some food for thought.

]]>http://davidwcampbell.com/2015/08/immigration-as-a-driver-of-economic-growth/feed/2New Brunswick, if……http://davidwcampbell.com/2015/08/new-brunswick-if/
http://davidwcampbell.com/2015/08/new-brunswick-if/#commentsSun, 02 Aug 2015 12:33:12 +0000http://davidwcampbell.com/?p=6633Continue reading →]]>The Economist magazine has an interesting segment this week called “The World, if….” which provides a series of stories similar to its The World This Week but only at some point in the near future after Hillary Clinton is President. It is a fun but serious look at one possible future.

It got me thinking about New Brunswick. Specifically, New Brunswick, if we are able to address some of our foundational challenges in the next few years. What would New Brunswick look like….

-If we get serious about immigration and demographic renewal.
-If we create an environment where high growth potential entrepreneurs want to build their businesses.
-If we address systemic challenges with the workforce.
-If we shed our fear of multinational firms and embrace the fact we are part of a global economy.
-If we are able to strategically develop our natural resources with a limited environmental impact and a high economic return.
-If we evolve our partnership with the federal government to one with a bold vision of growth for New Brunswick – not one of “ensuring comparable public services” through transfers.

If we got these fundamentals right, New Brunswick would be a different place than it is today. It would be a place of growing multiculturalism, where dynamic and ambitious entrepreneurs from Minto to Mumbai would want to come and build export-based businesses. Where key export-oriented industries had certainty that the future workforce would be in place giving them clarity for their business and investment plans. Where the resources sector would be creating high paying jobs and high value tax revenue for governments. Where are urban centres would be growing and thriving. Where communities around the province would be growing and grappling with the problems of growth – not the problems of decline.

Where the provincial government could be looking to cut tax rates as a dividend arising from growth not increasing them as a response to stagnation and decline.

Yes, housing costs would be rising. Yes, wages would be rising. Yes, some industries might be more challenged than others. But, in the end, New Brunswick’s challenges would be related to managing economic growth not – as is the current reality – managing economic stagnation and population decline.

]]>http://davidwcampbell.com/2015/08/new-brunswick-if/feed/0Why are we not promoting ‘homework’?http://davidwcampbell.com/2015/08/why-are-we-not-promoting-homework/
http://davidwcampbell.com/2015/08/why-are-we-not-promoting-homework/#commentsSun, 02 Aug 2015 11:02:03 +0000http://davidwcampbell.com/?p=6630Continue reading →]]>There is an excellent article in The Economist magazine this week about the rise of the freelance ‘bughunters’. These are folks who get paid to find bugs that hackers use to break into websites and secure networks. There are tens of thousands of people that work in this area from home. I know a guy in Fredericton that does it from his basement in the evenings.

This is a recurring theme on this blog. There are now millions of jobs that can easily be done from home – some requiring limited skills and other requiring very high skills but the common denominator is that they can be done from anywhere. New Brunswick seems to have high unemployment in certain areas around the province – why are we not doing a better job at promoting and exploiting freelance and home-based work as an economic development effort?

Enterprise Rent-A-Car was looking to hire 100 or more people in New Brunswick at nearly $15/hour, full time work to take calls from home. I haven’t heard recently but they were promoting in Moncton, Fredericton and northern NB but were struggling to find workers.

IMO, this is a golden opportunity. We need more people working in New Brunswick, paying taxes and contributing economically to our communities. That is the fundamental challenge for our economy and ultimately for the fiscal sustainability of our province moving forward.

If we don’t want people to move to the jobs, we should bring the jobs to the people. There are millions of jobs that could be done in New Brunswick from home and – as the NHS data shows – we are at the lower end of the spectrum for home-based work.

]]>http://davidwcampbell.com/2015/08/why-are-we-not-promoting-homework/feed/0On higher wages and more taxes – a few thoughtshttp://davidwcampbell.com/2015/07/on-higher-wages-and-more-taxes-a-few-thoughts/
http://davidwcampbell.com/2015/07/on-higher-wages-and-more-taxes-a-few-thoughts/#commentsWed, 15 Jul 2015 12:04:50 +0000http://davidwcampbell.com/?p=6621Continue reading →]]>I have interesting conversations in my role here with GNB. Lots of folks offer a wide variety of commentary on what government needs to do to get the economy moving in the right direction.

Most people talk about the need for “high wage” jobs to “keep our young people home”, etc. etc. etc. but they don’t have a clear idea what that really means. The following table shows the number of workers by sector in New Brunswick (3-digit NAICS) and how average employment income in that sector compares to the provincial overall average employment income.

You will notice that eight of the top 25 sectors by employment are publicly funded industries. You will further note that all but two of them offer well above wages. We can have an argument about why this is the case but at the end of the day it is really hard to see how you will see any employment growth in those sectors without overall population and GDP growth. Public services respond to growth in demand which should correlate to population growth over time (with adjustment for demographic trends).

You will also notice the 16,000+ high wage professional services jobs in New Brunswick – again mostly serving local demand in New Brunswick. If the population is not growing, don’t expect the demand for lawyers and doctors and electricians to increase.

This bolsters my case for a big increase in the population under 40 in New Brunswick. As I have argued many times before – while there are some chicken and egg challenges here at the end of the day 1,000 new families creates the demand for somewhere in the range of 900 new jobs – nurses, doctors, teachers, electricians, lawyers, etc.

The other statistic that I wanted to share with you this morning is the average income taxes paid by age cohort in New Brunswick as this also bolsters my argument that we need to see a significant boost in the population under the age of 40 in New Brunswick. The prime tax paying years for the average New Brunswicker are between the ages of 35-54. The number of people employed in those age cohorts is dropping as well as in the cohorts that will be moving into those age brackets in the coming years. We need to back fill the pipeline of younger workers that will provide the lion’s share of taxes in the years ahead.

]]>http://davidwcampbell.com/2015/07/on-higher-wages-and-more-taxes-a-few-thoughts/feed/2Attracting high growth potential entrepreneurs (HGPEs) to New Brunswickhttp://davidwcampbell.com/2015/07/attracting-high-growth-potential-entrepreneurs-hgpes-to-new-brunswick/
http://davidwcampbell.com/2015/07/attracting-high-growth-potential-entrepreneurs-hgpes-to-new-brunswick/#commentsFri, 03 Jul 2015 10:55:58 +0000http://davidwcampbell.com/?p=6616Continue reading →]]>I just read that there is an incubator in Colorado focused on start-ups developing products and services for the emerging cannabis industry. This makes sense given Colorado’s laws related to the industry. It is a strategic advantage that most other states do not have.

I have written about this before but I think we need to evolve our thinking about start-up incubators/accelerators to reflect this trend towards specialization. There are incubators supporting green technologies, social media, the industrial Internet, food, and many others. In most of these cases a targeted value proposition is developed to attract high growth potential entrepreneurs not only from the local area but from across the country and beyond.

Imagine a smart grid incubator in New Brunswick that was attracting entrepreneurs from across North America to test their smart grid ideas here? That would be a smart way to leverage the NB Power/Siemens partnership for greater economic value for the province.

In truth we could look at other regional advantages – how about wood-related startups? Or fish? Or social media? Or contact centres? We have the highest concentration of contact centre workers in North America and very few technology-based start-ups (if any currently) developing products/services to fill niche spaces in that market.

Ultimately my concern is simple. If you have all this incubation and support infrastructure around the province but a limited pipeline of HGPEs we won’t realize the potential.

]]>http://davidwcampbell.com/2015/07/attracting-high-growth-potential-entrepreneurs-hgpes-to-new-brunswick/feed/1Looking for the rumours of gloryhttp://davidwcampbell.com/2015/06/looking-for-the-rumours-of-glory/
http://davidwcampbell.com/2015/06/looking-for-the-rumours-of-glory/#commentsTue, 30 Jun 2015 13:31:25 +0000http://davidwcampbell.com/?p=6612Continue reading →]]>I’m reading Bruce Cockburn’s biography this week so I have his music running through my head – hence the title of this blog. Anyone of a certain age will know the song and its meaning.

I’ve been grappling with the concepts of optimism as a precursor to economic growth. My old friend David Jonah tells the story of the “Greater Moncton: We’re Okay” campaign from the mid to late 1980s. They had an acute awareness that in order for Moncton to turn itself around the people of the community needed to have an optimism about the future. If entrepreneurs were optimistic, they would invest. If people were optimistic they would stay and build their careers. If governments were optimistic they would invest to support future private sector growth.

There is a lot of negativity in New Brunswick these days. It’s coded into social media and even mainstream media. Yet at the same time we read that 99 percent of Riverviewians are satisfied with their quality of life in New Brunswick.

So there are at least two competing narratives here.

First, things have never been better in New Brunswick. As the boomers head into retirement they have more money than any generation in history – less than their counterparts across Canada – but still more than the past. The unemployment rate (and the employment rate) is low by historical standards and I would argue if you back out the seasonally unemployed (not the same as seasonally adjusted employment but I’ll save that for another day) the ‘real’ unemployment rate is much lower (i.e. the share of the adult population that is ready, willing and able to work at any given time).

The second narrative is that New Brunswick is on the verge of collapse. People can’t sell their houses, young people are still leaving the province at a fast clip, the overall population is in decline, the public sector is in a large deficit heading towards a cliff and there is no hope for the future.

Long term readers of this blog will know of my aversion to dumbing things down to binary choices – something is either good, moral, righteous, etc. or bad, evil, toxic, etc. That is where the paid and vested interests want to take public policy arguments but the rest of us just get caught in the vortex.

New Brunswick is not on verge of collapse but we are not in the nirvana that should drive a 99% happy with quality of life rating. People need to understand that there are deep and structural trends that will fragment New Brunswick’s quality of life proposition in the future. If we do not get our population growing again and if the economy doesn’t start to grow again at a moderate growth rate – it will ripple through our society.

And there are ways to address this. Maybe there are rumours of glory. Maybe we could attract a lot more young immigrants. Maybe we could attract a lot more foreign students as a pipeline for the future workforce. Maybe we could develop our natural resources in a way that people would be comfortable with. Maybe we could drive an urban growth agenda. Maybe there are ways to expand our tourism sector.

]]>http://davidwcampbell.com/2015/06/looking-for-the-rumours-of-glory/feed/0Dispatches from the road – NYC editition: Notes on the NB brandhttp://davidwcampbell.com/2015/06/dispatches-from-the-road-nyc-editition-notes-on-the-nb-brand/
http://davidwcampbell.com/2015/06/dispatches-from-the-road-nyc-editition-notes-on-the-nb-brand/#commentsMon, 01 Jun 2015 12:45:42 +0000http://davidwcampbell.com/?p=6601Continue reading →]]>I’m in the Big Apple for a few days’ vacation and I stumbled across a few things of interest. First, over the last 10 years there has been roughly $1.4 billion worth of international salmon exports from New Brunswick the vast majority to the United States. Over that same period the total value of salmon exports from Nova Scotia has been $21 million.

Yet, three times yesterday I read on menus about Nova Scotia lox and salmon including at the market last evening. In all likelihood 98% of the salmon from east coast Canada consumed in New York is from New Brunswick but it is branded as Nova Scotian.

The other interesting observation is this Poland Springs bottled water. It’s everyone in New York City. In fact it is by far the most dominant brand of bottled water and it is clearly identified as coming from Maine. On the side of the bottle is a list of all the small communities in Maine where the water comes from.

Now I understand we have lots of water in New Brunswick – we don’t know how much as I am told – but no firm is bottling it and branding it as NB water in Toronto or Montreal. Should we be promoting water as an economic development opportunity? The brand component comes as a side benefit.

New Brunswick is a small place – smaller than dozens of cities across North America. But there are lots of small places that have branded themselves well particularly related to specific natural resources – food, wood, etc. Maybe we should give more thought to how we can modestly expand our brand using the products that come from here.

]]>http://davidwcampbell.com/2015/06/dispatches-from-the-road-nyc-editition-notes-on-the-nb-brand/feed/1Don Draper gets his mojo back: Lessons for NBhttp://davidwcampbell.com/2015/05/don-draper-gets-his-mojo-back-lessons-for-nb/
http://davidwcampbell.com/2015/05/don-draper-gets-his-mojo-back-lessons-for-nb/#commentsThu, 21 May 2015 11:08:31 +0000http://davidwcampbell.com/?p=6598Continue reading →]]>I don’t know if you watched the Mad Men series but I thought the finale was quite interesting. From the very first episode we were led to believe that the life of a mad man was intense but ultimately terminal as the show opening every week shows the silhouette of (presumably Don) someone falling to their demise off a building as advertising images flicker in the background.

The finale pushed us in that direction. Near the very end we see Don calling Peggy from a payphone and decrying his life and the meaninglessness of it all. He had gone to a hippy commune to find himself but it only got worse. Peggy suggests he shouldn’t be alone right now and worries about Don’s life.

She tells him there is a lot to live for – doesn’t he want to come back and work on Coca-Cola? For a moment we are led to believe that not only is that idea not appealing to Don – in fact it is that idea that has led him to his demise.

Then in the second to last scene, Don is doing yoga with the hippies and the camera slowly zooms in on Don’s face. We see a big grin appear on his face and, then, the scene cuts to the most famous Coca-Cola advertising campaign of all time – “I’d like to buy the world a Coke” with a bunch of hippies holding bottles of the fizzy drink talking about peace, love and nirvana.

My wife thought it was a strange ending but I thought it was perfect.

Don’s real problem was never the women, drink, etc. In the context of the show, it was that he felt he lost his mojo. In the depths of despair and in the company of those strange hippies he got his creative inspiration back – another carousel moment – the x factor that made him the king of Madison Avenue. We are left to conclude – deliciously – that he goes back to McCann and creates the most successful and famous advertising campaign of all time.

I might be wrong about this and I purposely didn’t Google it because I want to believe that was the point. How do you generate creativity – inspiration – innovation – moments of great genius? Whether it is an inventor, artist or mad man – what is the alchemy that leads to breakthrough moments?

We need this in New Brunswick. That are so many good people and organizations doing interesting things but when we look at the big picture we are in need of a breakthrough – a Sputnik moment – a Don Draper Coca-Cola moment.

Our economy is flat. Our population is stagnant. If the demographic trend continues on its current course we are destined to lurch from crisis to crisis over the next 25-30 years.

We need to significantly boost our population – particularly the under 40 population to balance our demographic situation. We need to boost our GDP at least at a moderate level to ensure we can afford the public services and infrastructure we care about. We need more innovation, more high growth entrepreneurs – more optimism.

In 2006 the Self-Sufficiency agenda warned that we must increase our population by 100,000 by 2026. Nearly 10 years later there is less appetite for population growth now than back then. Economists and economic policy gurus were warning back then about the weak GDP growth and its long term impacts on our fiscal situation. Now we are in our seventh year with zero real GDP growth and while there continues to be some voices warning about this – there isn’t much urgency about it.

I have been writing and thinking about this stuff for years and I feel a little Draper-esque (without the side effects). I can’t seem to formulate that single, unifying concept that will bring light bulbs over the heads of those that need a light bulb moment.

]]>http://davidwcampbell.com/2015/05/don-draper-gets-his-mojo-back-lessons-for-nb/feed/1Social capital in New Brunswick: Some good and some not so good newshttp://davidwcampbell.com/2015/05/social-capital-in-new-brunswick-some-good-and-some-not-so-good-news/
http://davidwcampbell.com/2015/05/social-capital-in-new-brunswick-some-good-and-some-not-so-good-news/#commentsThu, 21 May 2015 09:13:52 +0000http://davidwcampbell.com/?p=6596Continue reading →]]>Statistics Canada recently published its “Trends in Social Capital” report for Canada and the 10 provinces. It is based on a wide ranging survey of concepts meant to test social capital including number of friends, contact with neighbours, participation in community groups, etc.

Positive highlights:

The ethnic diversity of social contacts: The percentage of NBers who in the past month were in contact with at least a few friends from a visibly different ethnic group from their own rose from 37 percent in 2003 to 42 percent in 2013. I have a hunch that if every NB-born person that is nervous about immigration sat down and broke bread with an immigrant most would drop their concerns.

We still fare quite well on the “lost wallet” test. 55 percent of NBers say it is very likely to have a lost wallet or purse returned if found by a neighbour. that is down slightly from 2003 and ranks behind NL and PEI only.

Red flags:

In 2013, Quebec (36%) and New Brunswick (46%) were the two provinces with the lowest rates of monthly participation in group activities. Among other provinces, the participation rate varied between 51% and 55%. Civic participation is a very important concept. That less than half of us do not participate in group activities is a concern.

Quebec (36%), and to a lesser degree New Brunswick (51%), recorded the lowest levels of generalized trust.

Social contact with friends: The percentage of NBers who saw their friends a few times or more a week dropped from 67 percent in 2003 to 51 percent in 2013. People who contacted their friends a few times or more a week dropped from 64% to 53%. This was not unique to NB – this trend was pretty consistent across Canada.

Social contact with relatives: The percentage of NBers who saw relatives a few times or more a week also dropped significantly from 55 percent in 2003 to 38 percent in 2013.

Linguistic diversity is not where it should be: The percentage of NBers who in the past month were only in contact with people with the same mother tongue as their own was 59 percent. In a province where 44 percent of the population speak a language other than English (Francophones, bilingual anglophones and other languages) you would think that percentage might be lower.

]]>http://davidwcampbell.com/2015/05/social-capital-in-new-brunswick-some-good-and-some-not-so-good-news/feed/0The paradox: Population growth could limit outward population migrationhttp://davidwcampbell.com/2015/05/the-paradox-population-growth-could-limit-outward-population-migration/
http://davidwcampbell.com/2015/05/the-paradox-population-growth-could-limit-outward-population-migration/#commentsThu, 14 May 2015 12:36:06 +0000http://davidwcampbell.com/?p=6593Continue reading →]]>One of the reasons most cited for not ramping up our immigration efforts is the out-migration of our young people. Why do we need immigrants when many of our kids can’t find jobs?

As always, the answer is more nuanced. Many of the kids that leave are professionals that have university education and are not aligned with many of the available jobs in manufacturing and front line services.

My working hypothesis is that more immigration will lead to more higher end professional jobs. First, you have to realize that most of the professional career jobs in New Brunswick are directly related to the population living in the province. In other words, the services they provide cater to the population. If the population is not growing, the number of jobs will not grow either.

Specifically, for every 10,000 people living in New Brunswick, there are (using NHS data):

In fact, for every 10,000 people living in New Brunswick there are 4,800 people working of which more than 3,000 are employed to provide goods and services to New Brunswickers.

A flatlined population means these thousands of jobs will not exist.

In 2006 Shawn Graham set a goal of growing the population by 100,000 by 2026. We are now in 2015. If we had the 50,000 population growth, ceteris paribus, we would have at least 15,000 jobs of which thousands would be in professional occupations as described above.

If you want new pharmacists, dentists, electricians, lawyers (sorry, it’s true) to stay in New Brunswick, we need to grow the demand and the demand grows through population growth.

]]>http://davidwcampbell.com/2015/05/the-paradox-population-growth-could-limit-outward-population-migration/feed/1Losing out best and brightest, illiterate, over-taxed, bankrupt….. Folks, relaxhttp://davidwcampbell.com/2015/05/losing-out-best-and-brightest-illiterate-over-taxed-bankrupt-folks-relax/
http://davidwcampbell.com/2015/05/losing-out-best-and-brightest-illiterate-over-taxed-bankrupt-folks-relax/#commentsSun, 10 May 2015 15:18:30 +0000http://davidwcampbell.com/?p=6585Continue reading →]]>A friend of mine used to call me “Dr. Doom” as on these pages I routinely expose some fairly challenging economic and demographic data. A role I will continue to play.

But the reason I expose this data is not to mire folks in doom and gloom but to encourage us to rise up and address our challenges as communities and as a province.

The problem is that we can get lost in this negative narrative and this can lead to exaggeration and hyperbole. So, following from some of the blogs and social media posts I have read just in the last few weeks, here are a few ‘facts’ for you to digest:

“We are losing out best and brightest” – My research and that of Dr. Haan does confirm that those who move away have on average higher educational attainment levels than those who remain in New Brunswick. But that doesn’t mean all our “best” and “brightest” have left. A small province such as New Brunswick will have a fair amount of folks who want to leave for a variety of reasons. Did you know there are only 15 geological engineers in New Brunswick? 25 denturists? 25 physicists and astronomers? 35 archivists? Only 25 actors and comedians? There are hundreds of occupations that you will likely have to move out of New Brunswick to pursue. That doesn’t mean all of our best leave and it should not stop us from trying to attract immigrants.

It is true that the net outward migration rate has been increasing in recent years and is concerning but over the past five years the annual net migration rate has been -0.23% of the population. The sky is not falling.

“We are illiterate” – Literacy is a challenge to be sure but when I hear people say 60% of NBers are illiterate, I cringe. First of all, it is true that 51% of NBers aged 25-64 have only level 1 or level 2 literacy (data here) but that doesn’t mean 51% can’t read or write. Only 17 percent have level 0 or 1 literacy which means they really struggle. In fact, Newfoundland and Labrador, Quebec, Saskatchewan, British Columbia and Manitoba all have 17% of their 25-64 population with 0/1 literacy. In fact, we are close to both the Canadian and OECD averages for literacy scores.

Is it a serious social and economic challenge? Yes. Are we that much worse than the rest of Canada? No.

“We are over-taxed” – There is not much to say here except that as Richard Saillant has pointed out the average NBer pays less tax today than they did 10 years ago as a share of their income – mainly because of the federal cut in HST. Our goal as a society should be to keep our tax levels similar to other jurisdictions in Canada.

“We are almost bankrupt” – Provincial government debt as a percentage of GDP is lower now than it was in the 1980s (and far lower than in the 1930s). Again, it is a big challenge but we have surmounted it before and we can again if we can get the GDP growing again and keep public spending below or at par with GDP growth.

Folks, relax. The point is the sky is not falling. We live in one of the most successful countries in the world and across a full range of economic indicators we are better off (as a province) than most countries in the OECD.

Four of the biggest challenges facing the province are: the shrinking under 40 labour force; the globalization of the economy; natural resources development and technological change. These four are among the biggest stressers that are creating our current economic realities.

A hundred tweets about our problems won’t get us to solutions. If we can crack these challenges – the shrinking labour force, our position in a globalized economy, etc. We will start to see the data start to turn around to the positive. And then we can start complaining about the problems that come with growth for a change.

]]>http://davidwcampbell.com/2015/05/losing-out-best-and-brightest-illiterate-over-taxed-bankrupt-folks-relax/feed/0Homebody redux: The ties that bindhttp://davidwcampbell.com/2015/05/homebody-redux-the-ties-that-bind/
http://davidwcampbell.com/2015/05/homebody-redux-the-ties-that-bind/#commentsFri, 08 May 2015 10:38:54 +0000http://davidwcampbell.com/?p=6582Continue reading →]]>I really enjoyed the HOMEbody symposium in Fredericton this week. The average age in the room was likely 25 and they were talking about pretty important things. I realize that this cohort may not like what Richard Saillant has to say and there is no obligation for them to believe it but they should hear it and take the time to deliberate.

In a world where we are crumbling under the weight of our tweets, we are making snap judgments on big issues faster than ever. Even those in their 20s should listen and discuss his message on demographics, fiscal realities and natural resources.

The best part, however; was the storytelling. 20+ youngish NB leaders telling their stories about how they crafted very successful careers in the Drive-Through province.

For many years I have had a hunch that New Brunswickers don’t feel as attached to their province as many others do (with the notable exception of Acadians). I don’t have any hard data to back this up but my experience over the years is that we are not as tied to our communities and province. Once a Newfoundlander always a Newfoundlander. Folks from PEI seem to be attached to their land. Quebeckers are fighting the good fight.

New Brunswickers? I’m not sure. A while ago I had a good conversation with a guy who moved from here to Saskatchewan. He told me as soon as the airplane touched down on the Prairies he became a Saskatchewaner. I had another friend from high school who removed the fact he had lived most of his early life in New Brunswick from his bio because it wasn’t a positive thing for his political career out west.

What binds us to this land? To our communities? To the province? Who are our cultural icons? Sports, music and art icons? Do we know? Do we celebrate them?

Part of the problem may be a lack of organizing event or concept. A big struggle or cause can bind people together but New Brunswick hasn’t had much of that. We have just stumbled along as a province over the decades – not big crises – no big growth events – not much excitement – ho hum.

Which brings me back to the storytelling. Those 20+ NBers told fascinating stories of travelling the world and finding their way back to NB. Of moving here from far and wide and building successful careers here. Of overcoming challenges to win the big prize from little old New Brunswick.

They are dynamic, successful people in their fields from all walks of life – and doing it right here, yes, in the Drive-Through province. All the demographic and economic data I can spew forth will not inspire people as well as these stories. It’s a good lesson for me, too.

]]>http://davidwcampbell.com/2015/05/homebody-redux-the-ties-that-bind/feed/0The case for public investment in economic developmenthttp://davidwcampbell.com/2015/05/the-case-for-public-investment-in-economic-development/
http://davidwcampbell.com/2015/05/the-case-for-public-investment-in-economic-development/#commentsFri, 01 May 2015 12:14:43 +0000http://davidwcampbell.com/?p=6579Continue reading →]]>I am sensitive to those that are wary of government spending on economic development. I share some of their concerns but there are a number of reasons why there should be a role for government in support of economic development.

For example there are cases where something is clearly in the public interest but where there is no easily discernable private market solution. Take the example of promoting your community or province far and wide as a good place to do business. We know the competition for business investment is more vigorous today than ever before but it is hard to see how the private sector would pony up the cash to pay to market a community or province. There are many examples of the private sector stumping up some cash (think the Moncton strategic partnership) but that is more philanthropic and not tied to a direct business case for the investment. It is in the public interest to promote the community but there is no easily discernable private market (profit motive) solution.

Think about investments in R&D. Governments around the world pour substantial sums into R&D – if we say no – we put ourselves at a competitive disadvantage. We still have to seek value for money but there does seem to be a public interest.

Then if you think about slightly more controversial government spending such as “lender of last resort”, investments in intermediaries (industry development groups, incubators, etc.), targeted investment in infrastructure that is public in nature but supports private sector activity (i.e. airports), the philosophy is the same even though we will disagree on specifics. There could be a distinct public interest (i.e. we need a strong economy) but no easily discernable private market solution.

This is an important distinction. Where there is a discernable private market solution the government should be wary of intervening as it ends up displacing and distorting markets. For example, if a project could be funded by private market sources but the proponent asks for government funding because it is easier money – that doesn’t really lead to economic development – just public funding crowding out private funding. This is not as simple a calculus as you might think because of the competition. If jurisdiction X is prepared to provide company Y with $1 million to set up there and NB says no – even though the province would get $5 million in new tax revenue – that is a harder thing for me to justify.

But the core principle remains intact.

An intelligent economic development model can discern between the two – when there is a public interest but no discernable private market solution versus initiatives where there is a discernable private market solution but the proponent (s) think that government money is a easier source.

]]>http://davidwcampbell.com/2015/05/the-case-for-public-investment-in-economic-development/feed/0Gladwell, the underground economy and NB’s fiscal gaphttp://davidwcampbell.com/2015/04/gladwell-the-underground-economy-and-nbs-fiscal-gap/
http://davidwcampbell.com/2015/04/gladwell-the-underground-economy-and-nbs-fiscal-gap/#commentsThu, 30 Apr 2015 23:42:49 +0000http://davidwcampbell.com/?p=6577Continue reading →]]>I recently heard Malcolm Gladwell ruminating on why the Americas are so good at paying their taxes. According to him, they have the highest tax paying rate (least cheating) among advanced economies and one of the most lax enforcement systems. He only mentioned Canada in passing but we are apparently well behind the Americans.

His conclusion is that Americans pay their taxes because they believe in the value of public services – that they are getting value for their taxes. He didn’t base it on some kind of morality (at least int he conversation I heard).

Anyway, I thought about that conversation when I read today that New Brunswick has one of the largest underground economy in Canada – estimated at $816 million per year – heavily influenced by residential construction. The last study I saw on this back in the 1990s speculated that the EI system was a major influence on the underground economy.

But I come back to Gladwell. Why would people in New Brunswick want to brazenly flout the law and avoid paying their fair share of taxes?

As we look to cut hundreds of millions from public spending, we could use the $100+ million in tax revenue…..

]]>http://davidwcampbell.com/2015/04/gladwell-the-underground-economy-and-nbs-fiscal-gap/feed/1Fracturing debate: Natural gas and aquaculturehttp://davidwcampbell.com/2015/04/fracturing-debate-natural-gas-and-aquaculture/
http://davidwcampbell.com/2015/04/fracturing-debate-natural-gas-and-aquaculture/#commentsSun, 26 Apr 2015 11:14:09 +0000http://davidwcampbell.com/?p=6575Continue reading →]]>The Economist magazine this week has an interesting story about an entrepreneur who has developed a technology that uses methane and bacteria to create low cost food for farmed salmon. All of the testing they have done shows the fish like the food and it provides all the nutritional value needed. The article suggests that the low cost of natural gas brought on by hydraulic fracturing has brought the cost of this technology to a level where it is cheaper than other food alternatives.

So I went online to find the article – I couldn’t find it on www.economist.com so I googled the terms ‘fracking’ and ‘aquaculture’ and I stepped right into Armageddon. Don’t get me wrong, few if any of the stories were about the intersection of fracking and aquaculture. It’s just that these two toxic topics are featured interchangeably in so many blogs and alternative media sources that I plowed for 20 minutes and couldn’t find anything related to the topic I was looking for. Interestingly a lot of the content was from bloggers in Nova Scotia and New Brunswick where these two issues are top of mind.

There is no doubt that someone coming cold to the debate about aquaculture or fracking if they decided to research on google they would be shocked and scared about both of these topics. It’s not a question of degrees – online debate circa 2015 is more polarized than every and if you are unlucky enough to google ‘fracking’ and ‘aquaculture’ you will see one far end of the pole.

It actually doesn’t have to be this way. There are a lot of common sense debates going on – they just rarely make it to the top of Google searches. I wouldn’t call Stephen Downes, the NB-based blogger and learning technology expert, a right wing fanatic and even he laid down on these pages the five conditions that would need to be in place before he would support hydraulic fracturing. You may agree or disagree with his list but that is far different that saying “fracking is going to destroy our water, turn our forests into an industrial wasteland and make New Brunswick uninhabitable. One argument is based on debating facts (albeit there is legitimate debate about ‘facts’) the other is based on emotion – principally fear but if they induce anger, frustration, etc. that is a bonus.

New Brunswick has some of the thickest if not the thickest shale formation in North America. We don’t have a lot of unique comparative advantages but this could turn out to be one. If that shale is hydrocarbon rich, if the gas can be extracted without serious negative impact on the environment and local communities maybe we should give it a try.

Will developing NB shale exacerbate global warming? This is way out of my sphere of expertise but from a straight economic perspective it is unlikely because stopping developing in one area doesn’t reduce demand. If we don’t extract our gas, other jurisdictions will just increase production to meet the demand that our gas would have been used to fill. Right now natural gas is being used to displace coal and to a lesser extent oil. That trend will continue whether or not we develop our gas or not.

The counter argument is “we all need to do our part” and it’s not our concern if other areas don’t care about the environment.

I disagree with that sentiment. If Canada took more deliberate steps to reduce its demand for carbon-based fuels that would be far more beneficial to the environment than efforts to curb supply. A 30% reduction in the demand for fossil fuel-based energy would be a steep reduction in our emissions. Stopping shale gas in New Brunswick would likely have no effect on global emissions and could raise them as the need to ship gas from far markets to the Maritimes is in itself an energy-intensive effort.

]]>http://davidwcampbell.com/2015/04/fracturing-debate-natural-gas-and-aquaculture/feed/1Seeking economic growth? It’s complicatedhttp://davidwcampbell.com/2015/04/seeking-economic-growth-its-complicated/
http://davidwcampbell.com/2015/04/seeking-economic-growth-its-complicated/#commentsWed, 01 Apr 2015 12:06:08 +0000http://davidwcampbell.com/?p=6571Continue reading →]]>In my new role I am partially tasked with helping government figure out its role in helping to foster a sustained level of economic growth in the years ahead. This is key to fiscal stability as a province not to mention as a way to ensure jobs for young people, vibrant communities, investment in infrastructure, etc.

But it is more complicated today than ever before. The labour market under the age of 44 has been declining for years. Competition for business investment is tougher than ever. Attitudes towards development – along with our aging demographics – are changing.

Way back in 1992 I returned to New Brunswick from a six-year educational odyssey in the United States. I started looking for a job but had a really hard time. I carpet bombed just about every organization in the province with resumes ( I sent out over 300 and still have 60+ rejection letters stored away some place as a reminder). I also called the HR departments of several of the larger firms (NBTel, NB Power, etc.) and one person actually told me they had 100 resumes for every position and would prefer to hire folks who graduated from a New Brunswick university. After about six months of nothing I started to contemplate a move to Alberta.

I got a call from Mike MacBride at something called the Department of Economic Development and Tourism about a two month temporary job doing ‘spreadsheets’. I eagerly took the job as I was well qualified after spending two years teaching Lotus 1-2-3(remember Lotus 1-2-3?) to undergraduates.

The job turned out to be pretty important. I was supposed to develop comparative cost templates that showed New Brunswick’s cost advantages over places like Toronto, Vancouver and Boston. These would be used to help the sales team pitch the province to national and international firms.

I wasn’t about to let that job get away. I worked like a dog – 12 hour days – weekends – and ended up parlaying a two month gig into nearly four years and that launched my career. I made myself indispensable. I turned the ‘spreadsheet’ analysis into full business case documents that were customized to individual prospective clients. I spent dozens of hours in the UNB library combing through Statistics Canada and other data sources picking out cherries to be used in our pitch. No one had ever done that before.

In the end, with our partner NBTel, we pitched dozens of national and international firms and each one of them got a customized business case document making the financial case for expanding in New Brunswick. A VP at UPS told me he slept with my proposal under his pillow.

I’ll never forget those years. The audacity of that small team of sales people to think they could convince IBM, Xerox, Air Canada, UPS, FedEx, ExxonMobil, RBC and many more to put national back offices and contact centres in little New Brunswick. I couldn’t believe it when I started in the job. Why would any big firm in their right mind put a large national operation in New Brunswick?

But if you look at the model closely, it actually made sense. The demand for these back offices and contact centres was rapidly expanding. Everyone needed 1-800 numbers and technology was enabling consolidated back offices. There were stories of insurance firms in New York shipping airplanes full of paperwork to Ireland each day to inputted into computers and processed. Premier Frank McKenna would get a meeting with the CEO (who would turn him down?) and all he would ask for is that the CEO let his team prepared one of these detailed business case documents for his firm. This document would then conveniently show a 15%-20% cost advantage or more from consolidating in New Brunswick and in many cases this tipped the decision to expand in New Brunswick.

That model – a clearly defined and compelling value proposition – is the template even today for successful economic development. What do we have here that will compel entrepreneurs and multinationals to invest here? If we have opportunities (1990s it was aquaculture opportunities, early 2000s it was a high quality, bilingual workforce, what is it today?) we can sell them to local and external investors.

I say this because my new role as Chief Economist for PNB under the Jobs Board is a homecoming of sorts. I always appreciated public service but never really saw a space that made sense for my skills and interests. But all my writing and cajoling hasn’t really made much impact on the economic development system in New Brunswick. It in large part hasn’t changed much in 20 years.

If we don’t find a way to get the province’s economy back to at least a moderate level of economic growth no amount of fiscal austerity will be enough to bring balance to the province’s books. We risk becoming essentially one big retirement home and this recent talk of converting hospitals to nursing homes is one of many signs this is currently in progress. The labour force in New Brunswick under the age of 45 in this province peaked at 251,000 way back in 2000 and has been declining since (now 210,000). This is a huge risk and I get a collective shrug when talking about it.

Shawn Graham’s Self-Sufficiency Agenda called for a 100,000 increase in the population by 2026 to try and rebalance our demographics. This was a very good idea. Unfortunately, since the Self-Sufficiency Agenda was launched our population has mostly stagnated and the population under the age of 45 has dropped 38,000. Again, collective shrug. The sense of urgency we all felt back in the mid of the last decade has given way to that collective shrug.

So, in the Nikolay Chernyshevsky fashion (yes, Lenin stole the phrase from Chernyshevsky ) – what is to be done? Obviously we don’t have the economic and social problems of late 19th century Russia. New Brunswick is a modern economy with strong infrastructure, good government and a relatively well educated population. We have small but solid urban centres that feature short commutes, relatively low housing costs, friendly neighbourhoods and low crime. They should be magnets for investment and entrepreneurship.

Anyway, for me the question was a simple but profound one. Do I give up an excellent consulting practice, a great relationship with Donald Savoie’s institute at UdeM, my column at the TJ to see if I can help craft and move forward a new growth agenda for PNB? I answered yes to that question. I am 47 years old. I want a bit more from life than just making money. Maybe, just maybe, we collectively can move things forward. Maybe, just maybe in 10 years from now we won’t be lamented a failed “Prosperity Plan” or a failed “self-sufficiency agenda”

Maybe we will be celebrating living in a province with its mojo back. A place that is attracting young professionals and families from around the world. A place that is incubating hundreds of ambitious entrepreneurs and attracting capital from far and wide.

Maybe. If I can play some tiny role in that vision. It’s worth a try.

PS – the most difficult thing was giving up my column in the TJ. I feel like an addict suffering withdrawal. It will be painful.

]]>http://davidwcampbell.com/2015/02/a-sort-of-homecoming-thoughts-on-my-new-role/feed/6By popular demand: My Economic Development Magnum Opushttp://davidwcampbell.com/2015/02/by-popular-demand-my-economic-development-magnum-opus/
http://davidwcampbell.com/2015/02/by-popular-demand-my-economic-development-magnum-opus/#commentsTue, 17 Feb 2015 11:24:39 +0000http://davidwcampbell.com/?p=6555Continue reading →]]>Well, not really by popular demand but I was asked by someone to choose 4-5 of the top themes that I think are important if we are to move New Brunswick’s economy ahead.

We must move from a financial program-centric to an opportunities approach to economic development: big opportunities (open government, smart grid), small opportunities (immigrant farmers in Carleton County) or highly targeted opportunities (Amazon, Walmart regional warehouses in Moncton). Now the model is 80% business financing programs/20% opportunities – we need to flip that to 20/80.

We need to implement an ROTI model (return on taxpayer investment) – all investments in economic development should be able to demonstrate a return on the taxpayers’ investment.

We need to turbocharge the workforce – Less worry on short term interprovincial migration and more concern for long term impact on business investment decisions arising from a tight labour market.

We need to target high growth potential entrepreneurs (HGPEs) not just our current small business fetish – we need to create the environment for these HGPEs – not just small business owners/lifestyle businesses. We want to be an environment where it is easy for small businesses to enter and exit the business playing field – we want to encourage lots of local competition and dynamic local markets. But our growth strategies need to be focused on those entrepreneurs that want to use NB as a base to build a global business.

We need to focus on attracting investment – particularly investment that fosters product or services export growth. This can be greenfield (i.e. attracting an Amazon fulfilment centre) or investment into HGPEs. We spend way too much of our effort trying to squeeze more investment out of the local business community. Between PNB, ACOA, CBDCs, local agencies, NRC, NBIF, etc. we have somewhere in the range of 300-350 people working in economic development in New Brunswick – not a single one located out in the actual world where the trade, investment and immigrant opportunities actually exist.

We need to break New Brunswick’s culture of apathy. We have gotten used to being at or near the bottom among the 10 provinces across most economic and demographic metrics. New Brunswickers need to believe their province can change, can address its big challenges and can become a younger, multicultural, growing and dynamic place that is developing growth industries – including natural resources – in a responsible and sustainable way. Do we want to be one big retirement village heavily reliant on the federal government to pay the freight or do we want to be a dynamic place that is growing and increasingly self-sufficient? If New Brunswickers tacitly choose the former it will make it almost impossible to turn things around in any kind of sustained way.

We need to fully engage local government and local community and business leaders in our economic development efforts.

We need a more intelligent partnership with the federal government that is based on its strengths – global trade and investment infrastructure, immigration policy, etc. not on increasing transfer payments. It is imperative the federal government share our vision for a growing and dynamic New Brunswick and see itself in that vision. If Ontario’s economy looked like New Brunswick’s does now – five years of virtually no real GDP growth, declining employment, shrinking labour market- it would be an international crisis. The OECD would weigh in on “what is wrong with Canada’s economic engine”. When it is New Brunswick, we all shrug and say “that’s just New Brunswick”.

We need to be able to develop our natural resources in a sustainable and responsible fashion. In the past 10-15 years Saskatchewan has used hydraulic fracturing to develop its oil resources and significantly expanded its other mining operations including uranium. In New Brunswick we have viscerally reacted to any talk of using hydraulic fracturing and after a few little red signs started appearing in windows and on bumper stickers uranium mining never even got off the drawing board.

We need an urban growth agenda. If you go back to the 1950s until today, rural population growth in New Brunswick was fairly similar to the rest of the country (modest increase). It was urban growth where we lagged substantially. Across Canada, the urban population grew by more than 18 million over that period and it grew only modestly in New Brunswick. An urban growth agenda should not be pitted as an “either-or” with rural New Brunswick. We need to have strategy to develop opportunities where they are – urban or rural.

We need to focus on innovation – across the spectrum. A small province should be able to make decisions faster and be more nimble that the larger, unwieldy jurisdictions. Now it seems like the opposite. It seems to take longer here than in larger places. Meghan Trainor is bringing booty back. I want to bring back the “living lab” vision for New Brunswick.

When messaging we need to target our audiences. Almost all stories in the national media relating to New Brunswick are negative. Business leaders, immigrants and other key groups see these stories. We need to change the national narrative. New Brunswick is a place of unlimited opportunity. Its urban centres have substantial room to grow. It has considerable natural resources. It is the new frontier – ready for a sustained era of economic and population growth. At the same time, we have to share with our internal stakeholders the real state of the union – the urgency – to break the culture of apathy described above.

]]>http://davidwcampbell.com/2015/02/by-popular-demand-my-economic-development-magnum-opus/feed/1The New Brunswick labour market time bombhttp://davidwcampbell.com/2015/01/6545/
http://davidwcampbell.com/2015/01/6545/#commentsSat, 24 Jan 2015 12:42:37 +0000http://davidwcampbell.com/?p=6545Continue reading →]]>Believe it or not I continue to have a hard time convincing some influential people that we have a serious and growing labour shortage problem. They will say what about the 10 percent unemployment rate? What about the fact we are still losing people to other provinces through interprovincial migration? How about the crippling youth unemployment rate?

The youth unemployment is a concern to be sure but even that needs to be put into perspective. The unemployment rate is highest among the 15-19 age cohort and those young people are either in school and/or living at home. Further, as shown below the absolute number of unemployed young people aged 15-19 continues to fall. It was an estimated 4,700 in 2010 and now it is 4,300. That is across the province. If we had that data by region there would likely be under a 1,000 unemployed in the entire Greater Moncton region, for example. Not the labour market apocalypse that some might tell you.

Even among the 20-24 age group, the unemployment rate (14.5% in 2014) is still below what it was throughout the 1990s and early 2000s. In 2003, it was 14.9%. And again, on an absolute basis it is in decline. In 2003, there were 5,500 persons aged 20-24 that were unemployed and in 2014 it was 5,000 across the province. Again, I have to reiterate that a large share of those are likely in some form of post-secondary education too. My concern is that this number (and the correlating outward migration) is a red herring causing dangerous policy moves.

If we step back from the short term challenge (and the new one relating to returning migrant workers from Alberta) and look at the ‘big picture’ we see a fundamental shift in the labour market. If you look at the following chart and overlaid a real GDP growth chart you would see GDP growth starts to collapse right about the same time as the lines cross in this chart. Yes there was considerable government stimulus funding that gave GDP a little shot in the arm and yes we still had the hangover from a few of the major investment projects but strip that out and there seems to be a correlation between the tightening labour market and GDP stagnation.

In the early 1970s there were in the 140,000+ range of people aged 10-19. The bulk of these people would be heading into the labour market over the coming 10 years. At the same time there were only 50,000+ aged 55-64 and presumably mostly leaving the labour market over the coming ten years. Even in the late 1980s there was a surplus of more than 55,000 using this measure. The lines crossed in 2007 and by 2014 there only 700 people aged 10-19 for every 1000 people aged 55-64. In other words, without inward migration we don’t have enough people even to replace existing jobs. Now, of course, labour markets are organic and adjust in many ways. Some people may retire late. Some employers may not replace workers as they retire. Some young people will continue to leave. But the underlying trend is a ticking time bomb holding back GDP growth and stagnating the tax base on which government extracts the money it needs to pay for public services.

I think this and the calcifying attitudes towards economic development are the two biggest challenges facing New Brunswick – even more than the public finances.

]]>http://davidwcampbell.com/2015/01/6545/feed/2A closer look at labour market availability and economic growthhttp://davidwcampbell.com/2015/01/a-closer-look-at-labour-market-availability-and-economic-growth/
http://davidwcampbell.com/2015/01/a-closer-look-at-labour-market-availability-and-economic-growth/#commentsMon, 19 Jan 2015 12:54:53 +0000http://davidwcampbell.com/?p=6539Continue reading →]]>It must be frustrating to be working for the provincial government and trying to convince the federal government of the need for a step change in the number of immigrants to New Brunswick. They are haggling over “a few hundred more” of Canada’s 280,000 (or whatever the number is) when we really need is thousands more.

Take a look at the following chart. The size of the labour market in New Brunswick expanded steadily in the post WW2 period even though a lot of NBers moved way. The chart shows the growth in the labour market after the effects of any outward migration. Between 1976 and 1984, the labour market expanded by more than 39,000 people (either working or looking for work). Between 1984 and 1994, it expanded by 42,600 and the next decade saw a 44,900 person rise. In the last 10 years the total labour market – employed and looking for work – grew by only 4,000. Even this is showing a rosier picture than it should. Between 2009 and 2014 the size of the labour market declined by 3,900.

If you look at the younger labour market, it has been in steep decline. Between 1994 and 2014, the total number of people aged 25-44 in the labour market declined to the point that the gains between 1984 and 1994 were wiped out. In other words, in 1984 there were 154,100 people aged 25-44 in the NB workforce. In 2014 there were 154,600.

And just about everyone is focused on the short term mobility and unemployment data in New Brunswick. We are missing the forest for the trees. The expanding labour market in New Brunswick for decades drove at least a moderate employment and GDP growth rate. Sure there was a surplus and those folks moved away to other provinces and beyond but net of that there were still tens of thousands more coming into the workforce boosting export-oriented industries and local, consumer spending-based industries.

In my opinion, the provincial and federal government should look to foster labour market expansion by similar levels as past decades. This would rebalance our demographic situation and allow for employment expansion, GDP growth and the boosting of tax revenues.

Sure we will continue to see some outward migration to other provinces but you could bake that into your planning.

I’m not suggesting this will be easy but unless we start talking about the forest, our focus on the trees will keep us locked in a long term period of economic stagnation.

]]>http://davidwcampbell.com/2015/01/a-closer-look-at-labour-market-availability-and-economic-growth/feed/1PS: Michael Horgan, don’t forget the other reasonhttp://davidwcampbell.com/2015/01/ps-michael-horgan-dont-forget-the-other-reason/
http://davidwcampbell.com/2015/01/ps-michael-horgan-dont-forget-the-other-reason/#commentsWed, 14 Jan 2015 11:42:38 +0000http://davidwcampbell.com/?p=6534Continue reading →]]>I see the province has retained Michael Horgan, who helped design the federal government’s budget deficit reduction strategy in the early 1990s, to assist in helping the NB government slay what they are now calling a $400 million ‘structural’ deficit.

Not to sound too Paul Krugman-esque but Horgan, Boudreau and Melanson need to remember it wasn’t all cuts that beat back the Canadian government’s deficit. The Canadian economy grew, on average, four times faster from 1994 to 2000 than it did between 1989 and 1993. Four times. Federal government revenue growth went from negative in 1993 and 1994 to robust growth from 1995 to 2001.

For me it is still an open question if you can cut a $400 million structural deficit without at least a moderate level of GDP growth. They are already talking about raising the HST, possibly tolls, etc. to increase revenue but that just takes money out of the private economy and doesn’t do anything to boost growth (some may say it will reduce growth).

Nova Scotia raised its HST by two points and is still running a fairly significant deficit. Average annual NS government revenue grew by only 1.21 percent between 2008-2009 and 2013-2014 according to RBC Economics – the worst growth rate among the ten provinces (but only slightly worse than NB’s 1.33 percent). Now, it is true there is a lot more going on in the NS economy – such as the decline in offshore royalties – but the general point that an HST rise didn’t fix the structural deficit is still valid.

Actions have consequences. IMO, New Brunswick needs a growth agenda more than it needs a provincial fiscal austerity agenda. We need a step change in GDP growth complemented by prudent fiscal management.

I had a good conversation with a policy guy before Christmas who advocates in favour of the feds tightening TFW and immigration to New Brunswick. In his view, in conjunction with tightening EI access, this will force more seasonal workers into year round work and bring down the overall unemployment rate.

My counter-narrative is that the changes will lead to less business investment and eventual downsizing and/or closure of a number of export-oriented businesses that rely on production wage levels under $16/hour.

His response was “good riddance”. We have spent too much time propping up low wage industries in New Brunswick.

I really struggle with this issue. Should the government be clamping down on firm efforts to bring in workers from outside New Brunswick if it hurts their ability to survive in the province? Politicians always talk about not picking winners and losers but are they not doing the same thing with immigration policy?

Over 50% of all workers in the Toronto manufacturing sector are first generation immigrants. In New Brunswick it is less than 4%. If firms cannot recruit locally, why not let them bring in foreign workers?

The policy guy told me that manufacturers will have to up their wage rates to attract NBers to work in the jobs and that “is a very good thing”. Again, fine for the petri dish but wrong in the real world. A guy who owns a manufacturing facility in New Brunswick and one in Ontario recently told me it is easier to recruit workers in Ontario than NB – at the exact same wage level and so they are ramping up Ontario. The kicker? The Ontario workers are mostly new immigrants.

We live in a world where borders matter less and less for trade, capital and knowledge flows. If we decide to tighten up even more on the inward labour flow – how does that benefit New Brunswick? We certainly are not tightening up on the outward labour flow…..

]]>http://davidwcampbell.com/2015/01/should-government-decide-which-industries-win-or-lose/feed/2I’ll take ‘labour market distortions’ if it means saving our communitieshttp://davidwcampbell.com/2014/12/ill-take-labour-market-distortions-if-it-means-saving-our-communities/
http://davidwcampbell.com/2014/12/ill-take-labour-market-distortions-if-it-means-saving-our-communities/#commentsThu, 11 Dec 2014 11:02:48 +0000http://davidwcampbell.com/?p=6518Continue reading →]]>If you want another reason why individual provinces need more flexibility around who they can bring in as temporary foreign workers (or immigrants) take a look at this Calgary Herald letter to the editor penned by Alexis Conrad, director general, Temporary Foreign Worker Program, Employment and Social Development Canada.

Conrad says the TFW program has led to a drag on wage growth in Alberta’s food services sector. This type of labour market ‘distortions’ is why the government had to make the changes to the program.

This proves my point to a tee. In Alberta they are worried about low wage growth in the fast food sector. In New Brunswick I am worried about the very economic viability of many communities around the province. If you design a program to address the former and it results in harming the latter – how’s that for good policy?

Now I know that all the think tanks are saying that if the government restricts TFWs in rural New Brunswick thousands of lazy, EI offenders will come out of the woodwork and rush into these manufacturing and processing jobs with gusto. Or, like their counterparts in Alberta, the firms involved well jack up wages to attract them in.

It looks like many of them will downsize and may eventually close their NB operations – a fate that is unlikely in Lethbridge’s McDonald’s restaurant.

There is a lot of strange thinking around this file. The only real solution, IMO, is to allow the provinces to determine what industries and workers are ‘strategic’ and allow them to bring in workers in support of their growth. If the feds want to crack down on the burger flippers, fine. But when they start to implement policies that hurt our export sectors such as manufacturing and tourism – that’s a problem. I will remind the feds that immigrant workers are critical for manufacturing in places like Toronto, Vancouver and even Winnipeg – and I would wager the majority are earning below the median wage in these communities. If you don’t want manufacturing workers coming to NB via the TFWP, then let them come in via PNP or some other stream.

“Equalization makes it easier for political actors to turn their backs on national resource development even though it is a potential source of jobs, revenue and economic growth,” said Ben Eisen, director of research at the Atlantic institute. “Economic incentives to move forward are weakened by the fact that when you do so, a large chunk of the money is clawed back through reduced equalization payments. So that is one of the ways equalization creates a disincentive to pro-growth economic policies in recipient provinces.”

If you search this blog for the word ‘equalization’ you will find dozens of blogs dealing with the subject of equalization and I am not, in general, disagreeing with AIMS and Fraser on this.

But I think there is a lot more going on here than just equalization. Saskatchewan was an equalization receiving province in the early to mid 1990s (remember that?) and that didn’t stop it from implementing the largest resources development expansion in the country – oil, potash, uranium, etc. Much of this expansion, by the way, was initiated under an NDP government. Saskatchewan is now the leading fracking jurisdiction in Canada.

I haven’t read the full AIMS report so they may have already pointed this out but to hang the reluctance to pursue natural gas development on equalization would be too simplistic.

There is also the issue of age. The median age in the area is now pushing 45 years compared to the early 20s in the 1970s. Public interest in development of any kind looks different when you have a young population looking for careers and opportunities compared to when the majority are either retired or so to be.

The lobbying efforts – public opinion – are stronger now than even a decade ago. It doesn’t seem to matter that virtually all of the anti-shale gas propaganda is coming out of the US and doesn’t reflect the Canadian experience. It’s powerful stuff. Take another look at Gasland – the slickly produced movie or search for ‘fracking’ on Amazon.ca – you will see multiple books on why fracking is going to destroy our world as we know it.

And I would say New Brunswickers – even more so than Nova Scotians – have a greater suspicion of big, evil corporations – particularly from the USA. The protests I have seen focused on this fact – “they come here – destroy the land, leave us nothing and take all the economic benefits away – leaving us with nothing but an environmental mess to clean up”.

The question is how to get New Brunswickers to take a look at this issue afresh. To study the experience in Saskatchewan and elsewhere in Canada. To think about practical development issues. To study the set of rules which are among the most stringent in North America.

I don’t think the equalization argument will work. It feeds long term stereotypes about lazy, entitled Maritimers sitting around sucking the hind teat.

If Maritimers could be convinced that natural gas development will not destroy the environment or despoil the water and will bring economic benefits they might come around to the idea. If they are convinced the industry can be properly managed and that gas wells at the end of their lives will be properly sealed and brought back to the land’s original state they may be convinced. If they can be assured their quality of life will not be significantly impacted (negatively) beyond the normal impacts of natural resources development (i.e trucks on the roads, etc.), they may come around. If they can be convinced we need the gas – and if we don’t develop it New Brunswick homes and firms will face big increases in costs – they might come around.

As John Herron used to say, “You can’t address an environmental question with an economic response”. This axiom will hold, IMO, until people’s basic living standards come into question – which in a country such as Canada is not likely at least in the next 20 year time frame.

]]>http://davidwcampbell.com/2014/12/is-equalization-a-disincentive-to-growth/feed/2The myth of corporate welfare in New Brunswick?http://davidwcampbell.com/2014/12/the-myth-of-corporate-welfare-in-new-brunswick/
http://davidwcampbell.com/2014/12/the-myth-of-corporate-welfare-in-new-brunswick/#commentsTue, 02 Dec 2014 12:16:08 +0000http://davidwcampbell.com/?p=6513Continue reading →]]>From a recent column in the Telegraph-Journal.
Kevin Lacey, protector of the sacred taxpayer, recently intoned in a Telegraph-Journal commentary that instead of setting up a new model for economic development, the New Brunswick government should “chart a new path” without “government-led regional development schemes”.

Lacey, the Atlantic Director for the Canadian Taxpayers Federation, uses just about every opportunity to rail against the widespread use of government subsidies to business, or corporate welfare, in New Brunswick.

He will be happy to see the latest data from Statistics Canada on provincial government subsidization of private industry. The statistics agency released provisional data for 2008 to 2012 on the amount of money that was provided to private enterprises by provincial governments across the country.

Guess which province had the lowest amount of business subsidization in the country in 2012? I’ll give you a hint. It’s known for maple syrup, rolling hills and untapped shale gas resources.

In fact, New Brunswick had the second lowest rate of business subsidization as a percentage of gross domestic product (GDP) of any province across Canada over the five-year period except Ontario. In an average year, the New Brunswick government transferred $72 million as “subsidies to private enterprises” or $2.75 per $1,000 worth of real GDP.

Prince Edward Island, Quebec and Saskatchewan had the highest rates of subsidization with over $15 worth of subsidies for every $1,000 worth of GDP. Even that bastion of private enterprise, Alberta, doled out nearly twice as much business subsidies as a percentage of GDP compared to New Brunswick.

The astute reader will remark that the bulk of subsidies in western Canada go to the agriculture sector. This is true but agriculture is a ‘sector’ just like any other. It has profit-seeking private enterprises that face a variety of competitive and technical challenges. Just like most other industries.

But even removing subsidies to the agriculture sector, New Brunswick doles less money than all other provinces except Alberta.

A decade ago, I looked at this issue and found the same trend. New Brunswick just doesn’t dole out as much money to industry as we are told.

So how come the corporate welfare reputation continues to stick?

Firstly, there are a few high profile cases that continue to surface in the media. Opponents of government-led economic development will reach back into ancient history and dust of Bricklin or point to the more recent Atcon as egregious examples of corporate welfare.
Second, while the total amount of money doled out by government is relatively small, the total number of firms receiving government support is much higher than the national average.

A 2009 study published by Industry Canada found that 13.6 per cent of small and medium-sized enterprises (SMEs) in Atlantic Canada received funding from government lending agencies compared to seven per cent among SMEs across the country.

This would seem to indicate New Brunswick gives out less money overall but spreads it around in smaller chunks to to a broader base of smaller and medium-sized firms.

Unlike Kevin Lacey, for me the issue is not ideological. It is more pragmatic. Under what circumstances should the government be a bank for industry and how do we determine if this is a good use of taxpayer dollars?

This is why I fully endorse the government’s move to an ‘opportunities-based’ approach to economic development. New Brunswick has specific assets, infrastructure and competitive strengths that should be catalysts for private sector investment and new entrepreneurial activity.

There is a role for government, working with community and business leaders, to determine what these opportunities are and how we can best exploit them to strengthen the economic foundation under communities across the province.

This doesn’t necessarily require a lot of ‘corporate welfare’ but it does require identifying and bolstering the value proposition for investment into those opportunities. If there is a good case for investment, private industry will come.

There is a public interest in economic development. I reject the idea that government should just stand back and hope for the best.

But effective and accountable economic development has been elusive in New Brunswick.

If you want an aspirational vision for our future as a province look no further than the New Brunswick Youth Orchestra.

I had the opportunity to watch the New Brunswick Youth Orchestra perform this weekend in Bathurst. My daughter is one of the four young musicians who play the clarinet so I get the chance to attend several performances during the course of the year. While analyzing the artists and the repertoire, I can’t help but think the youth orchestra represents a microcosm of a future prosperous and vibrant New Brunswick.

First, the orchestra represents where we will need to be demographically over the next 20 years. By my count, the orchestra is made up of about one-third new immigrants or the Canada-born children of first generation immigrants. This impressive cultural dynamic is a demonstration of how immigration will enrich our society and strengthen economic opportunity.

Second, even as it embraces multiculturalism the youth orchestra shows a strong commitment to New Brunswick’s two language heritage. The orchestra is made up of a good mix of young people with English or French as their mother tongue. During the performance the microphone was passed from one young person to another and each spoke in fluent French. This also should be our aspiration for the future.

Third, the youth orchestra is globally-oriented. The leadership brought in a rising star, Antonio Delgado, from Venezuela as Musical Director and Conductor. His unique style weaves a variety of influences including Latin American music which brings a little flair to the performance. As Delgado conducted Mexican composer Arturo Márquez’s Danzón No.2 in Bathurst, I glanced around the audience to see more than a few normally reserved New Brunswickers tapping their feet.

Fourth, the youth orchestra is focused on excellence. These young women and men are impressive. They individually work hard at their craft and come together under Delgado with beautiful and inspirational performances.

Fifth, the young musicians come from across the province. A prosperous future New Brunswick will similarly need to build on strengths and economic opportunities from one end of the province to the other.

Finally, the leadership is ambitious. The kind of ambition we need across our society in business and government. President and CEO Ken MacLeod wanted to project the youth orchestra on the world stage. They periodically tour through Europe and have played in world famous venues such as Carnegie Hall in New York City.

MacLeod’s ambition for the youth orchestra took a big leap forward several years ago when he brought the El Sistema program to the province. Sistema NB is an after school orchestral music program meant to “inspire children and youth to achieve their full potential and to acquire values that favour their growth and have a positive impact on their lives and society”. Sistema NB now operates four centres, in Moncton, Saint John, Richibucto and the Tobique First Nation, and engages more than 600 children daily.

Dynamic, ambitious, multicultural, focused on excellence, growth-oriented and globally connected. To me that sounds like the kind of New Brunswick I could get excited about.

If you get a chance to go see the New Brunswick Youth Orchestra you are in for a treat. They will be playing in Saint John on January 25th, Moncton and Sussex in February and the season finale will be held in Fredericton on March 29th.

You will witness young talent at its finest. You might also get a glimpse of the New Brunswick that could be waiting for us just over the horizon.

Why is research and development spending in New Brunswick on the decline?

Between 2001 and 2007 New Brunswick led the country among the 10 provinces in the growth of R&D spending (public and private). Between 2007 and 2012, total R&D spending in the province dropped by 19 per cent.

One reason has been the decline in government-funded research. Statistics Canada tracks annual spending on research and development by science, source of funding and by sector. Between 2001 and 2007 federal government spending on R&D in New Brunswick nearly doubled from $43 million to $84 million. Provincial spending increased from $5 million to $17 million.

However, since then government-funded R&D has dropped off the radar. Federal spending declined by eight per cent between 2007 and 2012 while provincial investment in R&D dropped back down to just $7 million in 2012.

I have asked a few people who should know why R&D spending has dropped since 2007 and I get a range of answers from “Statistics Canada isn’t properly tracking the spending” to “there just aren’t a lot of interesting R&D opportunities down here”.

One thing most people agree on is that we don’t have many public or privately funded research organizations that have the scale to compete for big national and international R&D projects.

One of the province’s long standing marine-related research organizations, the Huntsman Marine Science Centre in St. Andrews, has been involved in a variety of important research efforts over the years including an important role in the development of the aquaculture industry.

If we were ever going to be a world leader in some area of research it should naturally have something to do with the Bay of Fundy.

Jamey Smith, the Executive Director at the Huntsman, believes there are a wide variety of opportunities for more research that leverages both the physical and research ecosystems in the area.

He believes the expertise they have built working with the aquaculture industry could be used to tap international markets.

He also believes there is considerable opportunity to conduct more research into the medicinal properties of the fish and plants in the Bay of Fundy. The Huntsman already has one pharmaceutical industry client and is in discussions with another.

Smith says the Huntsman should be able to expand its research activities into the energy industry including the oil and gas development sector.

In recent years, entrepreneur incubation centres have been popping up all over the province. Beyond providing generic business support for start-ups, it would be interesting to align our entrepreneur incubation efforts with research and development opportunities.

For example, the Huntsman could become a global centre for marine-related research-based entrepreneurship. Entrepreneurs with interesting research ideas could be attracted from around the world to conduct their research in New Brunswick and also start their new business ventures here. We could match the researchers with capital and the business skills needed to effectively turn new ideas into business opportunities.

But this brings the conversation back to scale. There are few research organizations in New Brunswick, if any, with the scale to promote themselves in any serious way beyond the borders of the province.

We need to go back to the drawing board and think about how small provinces can effectively compete for research and innovation spending.

I would like to see us focus on the research organization that have enough scale or could build enough scale in short order to compete for global research opportunities. We need to focus in areas where we have an advantage although I am not necessarily making the case for research into the medicinal properties of dulse or periwinkles.

Finally, we need to think about how we can effectively collaborate to simulate scale. Maybe we should think about aligning all the federal and provincial trade development resources in New Brunswick with our research organizations to promote R&D opportunities far and wide.

We spend a lot of time and effort promoting New Brunswick seafood and other industries. R&D opportunities should be treated in the same way.

Former Premier Bernard Lord’s goal of becoming one of the top provinces in Canada for R&D spending per capita has long since been relegated to the dustbin. As of 2012, we are still dead last among the 10 provinces.

If we are going to make any real headway, we will need our research organizations such as the Huntsman Marine Science Centre to lead the way.

]]>http://davidwcampbell.com/2014/12/taking-full-advantage-of-our-rd-assets/feed/2Federal transfer payments to NB: Declining influencehttp://davidwcampbell.com/2014/11/federal-transfer-payments-to-nb-declining-influence/
http://davidwcampbell.com/2014/11/federal-transfer-payments-to-nb-declining-influence/#commentsTue, 25 Nov 2014 11:22:58 +0000http://davidwcampbell.com/?p=6504Continue reading →]]>Shawn Graham was in the news last week waxing about a variety of subjects but silent on maybe the most prescient aspect of the self-sufficiency agenda – the need to wean the province off its relatively high dependency on federal transfers.

Turns out Stephen Harper has the same vision for New Brunswick. Between the 2005-2006 budget years per capita federal transfers to NB as a percentage of per capita program spending dropped from 37.2% to 32.8% in 2013-2014. To put that in perspective if NB was still receiving 37.2% of its revenue needs from the feds – it would almost wipe out the current year deficit.

Between the 2009-2010 ad 2014-2015 fiscal years per capita federal transfers to all provinces rose by 17%. To NB they rose by 4% – or an amount well below the rate of inflation. As shown in the chart, Alberta and Ontario have run away with the lion’s share of increases. Ontario is up nearly $5 billion and Alberta is up over $2 billion.

We have talked about the reasons for this before. The two big issues have been Ontario falling into the need for Equalization and the per capita funding formulas themselves which heavily favour Alberta, SK, etc. which are rapidly growing.

The bottom line is that Graham was right to worry about dependency on federal transfers. He had an ally in Ottawa. The big difference, of course, was that Graham wanted to reduce dependency as a consequence of economic growth.

Percentage change in per capita federal support 2009-2010 to 2014-2015

]]>http://davidwcampbell.com/2014/11/federal-transfer-payments-to-nb-declining-influence/feed/0Alberta and income inequality: A second lookhttp://davidwcampbell.com/2014/11/alberta-and-income-inequality-a-second-look/
http://davidwcampbell.com/2014/11/alberta-and-income-inequality-a-second-look/#commentsThu, 20 Nov 2014 18:07:27 +0000http://davidwcampbell.com/?p=6496Continue reading →]]>This is, of course, a no-win blog post. Anything even remotely related to attempting to justify income inequality is like a red flag to the bulls of Pamplona.

In many ways the Soviet Union was the most equal society in history. You had a tiny cohort at the top and everyone else scraping around at the bottom. But they were equal at the bottom. I realize that is a cliche but it remains mostly true.

Guess which province has the lowest percentage of taxfilers reporting income under $15,000 per year? Alberta.

Guess which province has the lowest percentage of taxfilers reporting income under $50,000 per year? Alberta.

Guess which province has the lowest personal tax burden? Alberta.

Of course if you live in the big city you will have to allocate more to housing and I am not suggesting for a moment there are no ‘poor’ folks in Alberta.

Guess which province spends nearly $11,000 per capita on provincial government services? Well, lots. But Alberta is one of them although it is projected to drop somewhat in the coming years. On a per capita basis in 2013-2014 Alberta will spend more on provincial government services than BC, Ontario, Quebec, NB, NS and PEI.

I guess my point is that it is true that in a Piketty sense the owners of capital and highly specialized skills do better in a boom economy (SK is facing similar issues) but if the rest of people on the income spectrum are doing better their their peers in the rest of Canada (higher incomes/lower taxes) and the government is spending as much or more on public services – it becomes pretty hard to argue we moved back to feudal England or Russia.

Percentage of taxfilers reporting income less than $15,000 per year and $50,000 per year

For 2012. Source: Statistics Canada CANSIM Table 111-0008.

PS – guess which province is most ‘equal’ as measured by the lowest percentage of folks earning over over $50k per year? PEI with NB as a close second. If you look at the percentage at the top of the income scale $250k or higher, same thing. PEI and NB. New Brunswick has 28 people earning $250k out of every 10,000 taxfilers (0.28%) compared to 151 per 1,000 in Alberta (5.4 times as many).

]]>http://davidwcampbell.com/2014/11/alberta-and-income-inequality-a-second-look/feed/2The ‘real’ real unemployment rate in New Brunswickhttp://davidwcampbell.com/2014/11/the-real-real-unemployment-rate-in-new-brunswick/
http://davidwcampbell.com/2014/11/the-real-real-unemployment-rate-in-new-brunswick/#commentsMon, 17 Nov 2014 13:10:37 +0000http://davidwcampbell.com/?p=6493Continue reading →]]>There was a good article in the TJ over the weekend about the ‘real’ unemployment rate in New Brunswick. UNB economist Constantine Passaris postulates the real unemployment rate is much higher than 9.3 percent because people are responding to the Stats Can Labour Market Survey by saying the are not looking for work because in many small communities there are no jobs to look for. That puts them out of the labour market altogether and drives down the unemployment rate.

It is a fair point. A person that lives in a small town that doesn’t have many jobs may want to work but may not be looking (in the Stats Can definition of that term) and therefore be excluded from the formal data.

The broader point that neither expert addressed however was the ‘real’ real unemployment rate.

I estimate that somewhere around 35,000 to 40,000 New Brunswickers collect EI at some point every year. They work a certain number of weeks and then ‘quit’ or are ‘laid off’ and start collecting EI. Again, by definition, these people must be ‘looking for work’ in the Statistics Canada definition of that term and therefore must be included in the formal unemployment statistics.

But are they really available for work? By all technical definitions – Stats Can and Employment and Social Development Canada – they must be ready and willing to take work – and some do. But a large number do not.

The other issue relates to the skills and mobility of the unemployed. If a call centre in Moncton is hiring, it is realistic to think a former mill worker in northern NB will be a candidate for that job?

What is the ‘real’ real unemployment rate? The formal data is therefore a very crude metric to assess the state of the labour market. But it is used by the feds for example to establish various policies from EI eligibility to TFW programming.

The ‘real’ real unemployment rate should be measured by the ability of firms to find workers. In a ‘high’ unemployment area it should be easy to find workers (think Moncton circa 1992 when firms would get 200 qualified applicants for each available job – this was almost completely independent of the headline unemployment rate).

If you go around New Brunswick and talk with business people you will find them saying it is getting harder and harder to find workers – in low, semi- and high skilled occupations.

]]>http://davidwcampbell.com/2014/11/the-real-real-unemployment-rate-in-new-brunswick/feed/2It’s time to have a conversation about tourism developmenthttp://davidwcampbell.com/2014/11/its-time-to-have-a-conversation-about-tourism-development/
http://davidwcampbell.com/2014/11/its-time-to-have-a-conversation-about-tourism-development/#commentsWed, 12 Nov 2014 13:14:21 +0000http://davidwcampbell.com/?p=6489Continue reading →]]>The new Minister for tourism, Bill Fraser, has a good commentary in the TJ today talking about how the new government is “ready to invest in tourism”.

It’s nice to see they are now using the right return on the taxpayer investment language. They used to talk about how the millions of government spending on tourism would generate new ‘revenue’ for the tourism industry and come up with some multiple. That is the wrong numerator. If the denominator is the tax dollars invested in tourism marketing, the numerator is incremental tax dollars generated as a result of that marketing – not general revenue to the industry.

But the main issue remains. As I wrote about a few weeks ago, tourism industry revenue has been flat for years. Despite a massively ambitious new tourism strategy in 2010 that was focused entirely on growing revenue, industry revenue declined (based on the most recent data we have access to).

I think we need to have an honest conversation about the tourism industry and its ‘growth’ potential given the local, national and international context.

Again, I like tourism. What I don’t like is our tendency to talk loosely about ‘growth’ potential without any serious analysis. It would be okay for me if the tourism folks said “we don’t expect much growth in the coming years because of conditions x and y but we still see value in investing $13 million in tourism marketing to keep the industry from declining further”.

It just raises even more cynicism when you throw out all those rosy growth forecasts and it doesn’t happen.

In addition, an honest appraisal of the situation may lead to changes in approach. Maybe we need to link tourism more closely to immigration. Maybe we need to spend more time trying to attract tourism-related infrastructure investment rather than on marketing what we currently have.

Every time I work with local communities on economic development strategies I ask the question “who is out promoting the community for tourism infrastructure investment?” – new hotels, new tourism attractions, etc. The answer is always no one.

In a business setting if the product isn’t selling, maybe you need to work on the product. I think it is a good idea to blend different tourism assets and experiences into themes but maybe we could use a few new tourism assets.

]]>http://davidwcampbell.com/2014/11/its-time-to-have-a-conversation-about-tourism-development/feed/1Boosting population: Echos of the self-sufficiency agendahttp://davidwcampbell.com/2014/11/boosting-population-echos-of-the-self-sufficiency-agenda/
http://davidwcampbell.com/2014/11/boosting-population-echos-of-the-self-sufficiency-agenda/#commentsSun, 09 Nov 2014 11:41:56 +0000http://davidwcampbell.com/?p=6487Continue reading →]]>According to the latest Labour Force Survey there were 487,500 people in New Brunswick aged 15-64 – the population that feeds the labour market. Here is a question for you. What do you think the population in this age group was back in October 1990?

488,600.

Twenty-four years later and the population in New Brunswick between the age of 15-64 had declined marginally.

Across Canada?

The population in this age group is up by 5.4 million.

If New Brunswick had seen its population in this age group grow by just the national rate of growth over this period, there would be 143,000 more people in New Brunswick. With an employment rate of around 65% in this age group that would mean 93,000 more people working in New Brunswick.

At an average level of income, that would translate into roughly $4.2 billion worth of incremental labour income.

Which would result in roughly $6 billion worth of increased GDP.

Which would mean just about $1 billion in tax revenue for the provincial government.

Would we be having the demography, economy, fiscal health – etc. debate right now?

]]>http://davidwcampbell.com/2014/11/boosting-population-echos-of-the-self-sufficiency-agenda/feed/2Addressing NB’s economic challenges: The right messages to the right audienceshttp://davidwcampbell.com/2014/10/addressing-nbs-economic-challenges-the-right-messages-to-the-right-audiences/
http://davidwcampbell.com/2014/10/addressing-nbs-economic-challenges-the-right-messages-to-the-right-audiences/#commentsThu, 23 Oct 2014 18:12:56 +0000http://davidwcampbell.com/?p=6482Continue reading →]]>The best of the media tweeters, Jacques Poitras, recently tweeted comments of the new NB LG.

This is a good time to restate my view about targeting the right messages to the right audiences. Because some people will read the LG’s comments and say she is absolutely right. We need to stop talking about our challenges and focus on the positives.

But for me this would be a mistake. In fact, I believe the vast majority of New Brunswickers including those in power don’t realize the pickle we are in right now with respect to our economy and demographic situation. They hear it but have become immune.

Because I swim in all the data I guess it is easy for me to put on the prophet of doom cloak but the opposite effect – Pollyanna – doesn’t solve anything either.

So our core message should be one of potential and opportunity just as stated in Poitras’ tweet above (realizing this is true but only up to a point). But we still have to talk about the uncomfortable subjects too. Denying them or dismissing folks who talk about them as too negative isn’t the right approach.

We do face variants on two futures: One version of NB’s future is one of population growth, economic vibrancy and fiscal sustainability. Where creative people and entrepreneurs thrive. But the other version – stagnant economy, youth out-migration, fiscal weakness is the one we are trending towards right now.

]]>http://davidwcampbell.com/2014/10/addressing-nbs-economic-challenges-the-right-messages-to-the-right-audiences/feed/0What do shale gas and blueberries have in common?http://davidwcampbell.com/2014/10/what-do-shale-gas-and-blueberries-have-in-common/
http://davidwcampbell.com/2014/10/what-do-shale-gas-and-blueberries-have-in-common/#commentsTue, 21 Oct 2014 09:19:53 +0000http://davidwcampbell.com/?p=6480Continue reading →]]>The Province of New Brunswick covers a land area of 71,377.18 square kilometres. That works out to 17.63 million acres. Each shale gas well takes up between one and three acres. Using the high number of acres and assuming a high number of wells drilled on the high side that would result in something like 30,000 acres over a 30-year period

This would result in a total land area allocated to oil and gas development of 0.17 percent. That is less than one fifth of one percent or about the same as is currently used for blueberries.

The legislation forces gas development firms to re-mediate the land back to its pre-well state so even if the industry continued beyond 30 years it is hard to see how it could ever consume more than a fraction of one percent of New Brunswick’s total land mass.

I raise this point only because a friend of mine used a variant of the term “industrial wasteland” again when discussing the shale gas industry. I’m all for a vigorous debate about shale gas but as the old saying goes “you are entitled to your own opinions but not your own facts”.

If New Brunswick gets around to developing its natural gas reserves it will create more industrial activity. There will be more trucks on the road, more burly men in the woods and, yes, more people in Emergency Rooms with fractures and other maladies.

But there is no evidence vast swathes of the province will be turned into an industrial wasteland.

]]>http://davidwcampbell.com/2014/10/what-do-shale-gas-and-blueberries-have-in-common/feed/0Ten-year NB employment growth by sector. You might be surprised….http://davidwcampbell.com/2014/10/ten-year-nb-employment-growth-by-sector-you-might-be-surprised/
http://davidwcampbell.com/2014/10/ten-year-nb-employment-growth-by-sector-you-might-be-surprised/#commentsSun, 19 Oct 2014 21:45:30 +0000http://davidwcampbell.com/?p=6474Continue reading →]]>It is interesting to look at the employment trend by sector in New Brunswick over the past decade as it does put things into perspective. On a seasonally adjusted basis, in September 2004 New Brunswick had 352,600 people working. In September 2014, there were an estimated 354,100 working – or a difference of +0.4 percent (rounded down in the table). Nationally, the economy added 1.95 million jobs over the 10-year period.

The table below shows the sectors that added and those that lost employment over the period. This is from the LFS so the aggregation is quite high but it does provide a high level snapshot of what has been going on. NB’s agriculture sector is quite small relative to the country as a whole – still it has shed 46% of total employment over a decade – or about 3,200 workers. Manufacturing has dropped about 30% of its workforce.

I have been warning about transportation and distribution for years but I can’t seem to get any kind of good answer as to why this sector has shed nearly 5,000 jobs over the decade. The big jump in public administration employment is strange. Maybe some kind of anomaly in the data as it is showing 3,500 more workers in Sept 2014 than just one year ago back in Sept 2013. September 2009 was actually the high watermark for Septembers – there were an estimated 27,200 workers in public admin in that month – just slightly below the 27,000 in Sept. 2014.

Look at health care and education employment. Those two sectors combined across Canada have accounted for 776,000 new jobs. In New Brunswick, 4,300 net new jobs (0.55% of the national total). Now, these sectors tend to track overall population growth (which is virtually zero in NB and robust across Canada) but it is a reminder that so much of the service sector (and construction) is reactive to overall population growth.

Other than public admin, NB saw employment growth in the utilities sector rise faster than the country as a whole as well as the info, culture and recreation sector.

]]>http://davidwcampbell.com/2014/10/ten-year-nb-employment-growth-by-sector-you-might-be-surprised/feed/1NB and NS: We’re all in this together (employment stagnation)http://davidwcampbell.com/2014/10/nb-and-ns-were-all-in-this-together-employment-stagnation/
http://davidwcampbell.com/2014/10/nb-and-ns-were-all-in-this-together-employment-stagnation/#commentsThu, 16 Oct 2014 10:10:55 +0000http://davidwcampbell.com/?p=6470Continue reading →]]>The teeny bopper movie that was so popular a few years ago called High School Musical featured a catchy song called “We’re all in this together”. This could be the theme song for New Brunswick and Nova Scotia. The chart below shows employment growth in the two provinces from September 2005 to September 2014 (on a seasonally adjusted basis). I show it as an index but it really means Alberta’s employment has grown by 25% and Nova Scotia by 2%. An index allows me to display my economic bona fides.

The two provinces have witnessed virtually no employment growth over the nine year period. Note that PEI has started to pull away from NS and NB. The Island is by no means booming but a strong focus on immigration and the growth of a few key sectors such as biosciences is showing up in the numbers.

The interesting thing to me is that this doesn’t seem to bother a lot of folks and, in fact, I get emails suggested we should “get used to it” and it is the “new normal” and even “it’s a good thing”.

Maybe. I don’t claim to have all the answers but I see a long, difficult period ahead for this province if we don’t get population and employment growth back to at least a moderate growth position.

]]>http://davidwcampbell.com/2014/10/nb-and-ns-were-all-in-this-together-employment-stagnation/feed/2What the Mactaquac Dam says (or doesn’t say) about our view of the futurehttp://davidwcampbell.com/2014/10/what-the-mactaquac-dam-says-or-doesnt-say-about-our-view-of-the-future/
http://davidwcampbell.com/2014/10/what-the-mactaquac-dam-says-or-doesnt-say-about-our-view-of-the-future/#commentsMon, 06 Oct 2014 12:26:48 +0000http://davidwcampbell.com/?p=6467Continue reading →]]>If you read the history of New Brunswick’s big electricity generation projects you will find they were meant to facilitate economic growth. Going back to the 1920s, the main rationale given for big public investment in power projects was to facilitate economic development – heavily related to forestry but also mining and urban growth.

The same applies to the Mactaquac dam. It was a key reason why the Nackawic Pulp Mill was built in 1970.

That was then. This is now.

Most of the discussion now is about how we won`t have any need for Mactaquac power in the future.

Whereas throughout the 1900s the rise in power generation was a driver of economic growth in the 2000s the closure of generation plants and the decline in power will come as a reaction to decline.

Now of course no narrative is ever so neat and tidy. We now focus more on energy efficiency. We want to reduce our energy footprint per dollar of GDP. We want the energy we produce to be cleaner and less hard on the environment. Maybe we will move more towards distributed generation. Who knows?

For some the Mactaquac dam is an ideal source of power because of no carbon emission and the huge disruption that comes from the initial development of hydro power is done. A new ecosystem has developed that would be disrupted again if we tried to remediate the Mactaquac dam back to 1960.

But I still can`t avoid that nagging feeling that this is just part of the NB decline narrative. Like the folks in the Department of Finance warning universities and colleges they will need to downsize their expectations. Or the whole narrative about austerity. It`s a culture of decline.

Yet few have thought through how continuing decline will fully impact our province.

Those who like the idea of a slow paced, retirement-focused New Brunswick where Sunday afternoon drives through the rolling hills are the week`s highlight haven`t thought through the sustainability of that vision.

I have never argued for massive growth but if we get to the point where decline is acceptable then we have to think about the implications and what we are prepared to sacrifice to support that decline.

]]>http://davidwcampbell.com/2014/10/what-the-mactaquac-dam-says-or-doesnt-say-about-our-view-of-the-future/feed/0Want to guess the fastest growing & biggest declining U.S. states & CDN provinces?http://davidwcampbell.com/2014/10/want-to-guess-the-fastest-growing-biggest-declining-u-s-states-cdn-provinces/
http://davidwcampbell.com/2014/10/want-to-guess-the-fastest-growing-biggest-declining-u-s-states-cdn-provinces/#commentsSat, 04 Oct 2014 12:50:58 +0000http://davidwcampbell.com/?p=6462Continue reading →]]>It may be a coincidence but it is an interesting one. Statistics Canada has a chart showing the six fastest growing U.S. states and Canadian provinces and the six slowest growing (actually declining) by population.

Other than Nunavut, the five fastest are all oil and gas production jurisdictions (Alberta, Saskatchewan, North Dakota, Utah and Colorado) and the ones with the biggest decline in population are Maine, Nova Scotia, West Virginia, New Brunswick and Newfoundland and Labrador – all notably absent from oil and gas development with the huge exception of Newfoundland and Labrador.

The issue in NL is that the offshore fields require significant employment while they are being developed but little during production. The Newfoundland and Labrador economy is still facing a lot of upheaval in other sectors and in many areas outside a few communities.

The issue in NB, NS and Maine? – well see blogs 1-3,200 written on these pages.

If someone asked me to name the most entrepreneurial university in Canada (the one most supportive of business startups), my first thought would be the University of Waterloo. However, at the 2014 Startup Canada Awards this year our own University of New Brunswick was named Post-Secondary Institution of the Year.

I recently sat down with Dr. Dhirendra Shukla, chair of the J. Herbert Smith Centre for Technology Management and Entrepreneurship, to find out how UNB earned this impressive title.

He told me UNB has made entrepreneurship a priority by combining technical education with entrepreneurial projects and support for business skills development.

In a press release announcing the accolade, UNB president Eddy Campbell says the university “has earned its spot as the most entrepreneurial university in Canada because we’ve established infrastructure on our campuses that empowers our faculty, staff and students to transform ideas into industry-leading technologies and business solutions.”

The university has several entities that support entrepreneurs including the International Business & Entrepreneurship Centre, Pond-Deshpande Centre and Wallace McCain Institute.

But in the end these things always come down to the quality and ambition of the people involved and I am particularly impressed by Dr. Shukla.

He has a PhD in entrepreneurial finance from King’s College in London and was in a senior role at Nortel back in 2009 when UNB came calling. He was recruited to Fredericton to fill the Dr. J. Herbert Smith Chair for Technology Management and Entrepreneurship and hasn’t looked back.

The number of students has swelled since he joined UNB and the school is now churning out on average 10-12 new startup companies per year.

Shukla has given a lot of thought to how the University of New Brunswick can advance its position. He would like the university to be a magnet for young entrepreneurs from around the world. These bright young entrepreneurs would be the feedstock for the province’s business incubation and acceleration centres such as PropelICT and PlanetHatch. In fact, already upwards of 30 per cent of his students are from outside of Canada.

He aspires for UNB to be Canada’s version of the Center for Entrepreneurial Studies at the Stanford Graduate School of Business in California. That is a bold vision as Stanford has graduated more technology company founders than any other university in North America.

Dr. Shukla also has big dreams for New Brunswick.

When he moved here he was impressed by how much space and time this place gives for deep thinking. He told me there is “is no better place to think”. His ambition for New Brunswick is to be a “brain for the world”.

This aligns nicely with my recent musings on the uncomplicated life afforded to New Brunswickers. Will we squander this lifestyle totally on fun and recreation or will be use it to be Shukla’s brain for the world?

He has little patience for naysayers. He has lived on four continents and thinks that anything can be accomplished in New Brunswick.

As he builds his vision for New Brunswick, the new Premier could use a dose of Shukla’s infectious optimism.

In recent months he has been contemplating a new framework for leadership. His has an interesting new take on ‘contextual’ leadership. Different times and contexts call for different leadership styles.

To pursue this line of thought, Shukla is teaching a new course “Leadership in an era of deep change” with former UNB President Dr. John McLaughlin. He told me there is a broad mix of students young and old from a variety of walks of life in the course.

This is a timely subject for New Brunswick. I think most of us are beginning to understand that things are changing in this province. There is no doubt the many demographic, economic and social forces buffeting the province will be transformative in the coming 10-20 years.

But transform into what? Will we be a brain for the planet or one giant retirement village?
I hope Dr. Dhirendra Shukla’s vision wins out in the end.

David Campbell
davidwcampbell.com
An economic development consultant based in Moncton

]]>http://davidwcampbell.com/2014/10/new-brunswick-a-brain-for-the-world-pearls-of-wisdom-from-dr-dhirendra-shukla/feed/0New Brunswick played crucial role in the founding of Confederation!http://davidwcampbell.com/2014/10/new-brunswick-played-crucial-role-in-the-founding-of-confederation/
http://davidwcampbell.com/2014/10/new-brunswick-played-crucial-role-in-the-founding-of-confederation/#commentsWed, 01 Oct 2014 16:44:03 +0000http://davidwcampbell.com/?p=6458Continue reading →]]>Ged Martin, the chair of Canadian studies at Edinburgh University in Scotland, was in New Brunswick this week to stir the pot. He told a packed house (maybe not that packed) that New Brunswick was the main reason why the Confederation occurred and survived. As stated in the TJ “Despite Prince Edward Island touting itself as the birthplace of Confederation – New Brunswick actually played a greater role in ensuring the formation and early success of a united Canada”.

And…

“I have always felt that New Brunswick has a bit of a collective historical inferiority complex about the standard story that the province really didn’t do very much about confederation and had to be dragged kicking and screaming in. “I regard that as a travesty – New Brunswick’s role was in fact crucial.” Martin goes as far to say that the province largely “steered the formation and survival of the Dominion of Canada.”

Professor Martin, however, doesn’t seem to realize that more than a few folks down this way think that Confederation wasn’t a particularly good outcome for New Brunswick. I’m not suggesting there is an appetite to split away now – a la Scotland or Quebec ambitions – but more than a few historians, scholars and other thinkers have suggested that if the Nova Scotia had got its way and we ended up with the more limited “Maritime Union” this region would have prospered more than otherwise. It would have controlled its own immigration, trade, investment and other policies.

Professor Martin continues:

“It was New Brunswick politicians who ensured that the September 1864 Charlottetown Conference endorsed the wider union of British North America, not the smaller scheme of Maritime Union pushed by the Nova Scotians,” Martin said. “New Brunswickers ensured that the Nova Scotia push to get Maritime Union didn’t go ahead – they didn’t want that.” Martin said the province’s politicians felt that New Brunswick would essentially be relegated to “greater Nova Scotia” under a Maritime Union.

Again, in hindsight some would suggest Nova Scotia was on the right track.

I’m not a historian and I think this debate could play out endlessly with no real resolution. There are too many unknowns. Those that argue in favour of Confederation say New Brunswick would have ended up like Northern Maine. Those that argue against say Halifax would have been Boston. I have read a fair amount about the period and suspect that either the Yanks would have taken the area over or Upper Canada would have kept trying until they won.

It’s fun to discuss and interesting that one cloistered academic across the Pond is actually thinking about the land of maple syrup, fiddleheads and rolling hills. There are few of his ilk these days.

Among folks who have time to debate these things, the legacy of former Premier Bernard Lord is highly contested. His supporters point to balanced budgets as well as moderate GDP and employment growth. They characterize his time in office as a golden age for New Brunswick.

His detractors point to a series of what they call strategic policy blunders ranging from the scrapping of the Moncton-Fredericton toll highway, runaway automobile insurance premium growth, the Venezuelan Orimulsion scandal, his dithering over the Point Lepreau Generating Station refurbishment and an overall lack of any real movement on the big issues facing the province.

They also refer to his national battle with the federal government over equalization as a black mark on the province’s reputation. The subsequent “self-sufficiency” agenda of Shawn Graham (the concept of eliminating the province’s need for equalization) emerged as a response to Lord’s demand for more cash from Ottawa.

As usual there is some truth to be had in both camps but there is at least one aspect of Bernard Lord’s legacy that is unambiguous. He has the dubious distinction of being the only elected Premier in the province’s history to preside over a declining population.

According to the annual population estimates published by Statistics Canada, former Premier Richard Hatfield presided over a 85,000 person increase in the population during his 17 years in office. Under Frank McKenna, the population grew by a modest 25,000 people.

The total population during the Bernard Lord administration dropped by 5,000 (between 1999 and 2006). Meanwhile, across the country the population boomed. It increased by a robust 2.2 million people.

Shawn Graham’s Liberals returned the population to slow growth as the province saw an increase of 7,400 people between 2006 and 2010. The jury is still out on David Alward but it looks like he will eke out a tiny increase in the population between 2010 and 2014.

The bottom line is simple. The total population of New Brunswick has barely budged since Bernard Lord took over in Fredericton in 1999. At the same time, Canada as a whole has been in the midst of the biggest population boom in history. Between 1999 and 2013, the national population swelled by 4.8 million people. New Brunswick completely missed it.

Why does it matter? There are several reasons why at least moderate population growth should be a main objective of government.

First, we are about to hit a demographic wall. New Brunswick’s population aged 55+ has ballooned since 1999 – rising nearly 50 per cent. Without an infusion of younger workers in the near future, the province’s economic potential will be stymied.

Second, we need population growth to build up our tax base. The majority of economic activity in New Brunswick comes from consumer spending. If we have no growth in consumers it is hard to see how we can expect even a moderate increase in the tax revenues we need to pay for public services.

Third, New Brunswick needs more population to make better use of its infrastructure. People that visit New Brunswick are amazed at the amount of four lane highways, airports, universities and hospitals. For a population of 750,000 we have more than our share of infrastructure. We can either plan to scale it back through a long period of decline or we can make better use of it by boosting the population around the province.

I’d like to see community level plans for population renewal from one corner of this province to another.

It is strange that population growth has hardly been mentioned during this election campaign.

Our population challenge is barely on the politicians’ radar because a) folks that might live here in the future don’t vote now and b) a lot of New Brunswickers are perfectly satisfied with the status quo and the politicians instinctively know this even if the pollsters do not. Rolling into town telling people that you are going to bring hundreds of immigrants into their community will cost you votes.

The 2011 movie We Need to Talk About Kevin was a story about how people struggle to talk about a uncomfortable issues.

In New Brunswick, uncomfortable or not, we need to talk about population growth.

David Campbell
davidwcampbell.com
An economic development consultant based in Moncton

I wrote last week about what my father-in-law calls the “uncomplicated life” New Brunswickers enjoy by choosing to live in this province. Many of the little things we do every day without complication can pose a big challenge in a large urban area.

I got a firsthand refresher on this fact recently while dropping my daughter off at York University in Toronto. On a Sunday afternoon we spent 90 minutes in a massive traffic jam and then waited in a long queue to find an available parking spot at a local mall. Later than evening, friends of ours who moved to Toronto a few years ago regaled us with stories of how hard it is to live and get around in Canada’s largest city.

Traffic, crime, regulations, managing the cost of life and even something as simple as going for a walk can be more complicated compared to a place like Saint John or Fredericton.

For many people the hustle and bustle of Toronto or Vancouver is just part of the package. They are willing to put up with the complications of living in a very large urban centre in order to reap the benefits. However, there is evidence some those living in Canada’s largest urban centres would consider living and working in smaller cities such as Saint John, Fredericton and Moncton.

After writing the column last week, I received several emails from readers who concluded we should use the uncomplicated life to our advantage and try and convince folks living in large urban centres across Canada they should move to New Brunswick.

One lady suggested we should encourage Torontonian and Calgarian Boomers and recent retirees to leave their high cost, high stress environment behind and move to the bucolic Fredericton region.

Another told me we should convince professional and small business owners who could base their business anywhere in Canada to move to New Brunswick.

According to Statistics Canada, there are nearly 400,000 people who worked from home and live in the Toronto, Montreal and Vancouver metro areas. For many of them, because they work at home, that could just as easily be Saint John, Moncton or Edmundston.

In fact this is already happening. According to Statistics Canada, between 2006 and 2012 every single year more people moved from Toronto to Moncton than vice versa. While the numbers are not large it clearly shows a reversal of the historical out-migration at least for the Moncton metropolitan area.

We can also look to Saskatchewan as an example. After running an aggressive advertising campaign meant to convince people from Ontario to move to the prairie province, the number moving there jumped from around 1,500 per year in the early 2000s to over 5,000 in 2013.

Whether they come from Toronto, Vancouver or Bucharest, if New Brunswick could grow its population by a few thousand people per year it would provide a sizeable boost to the province’s gross domestic product (GDP) and tax base.

Not surprisingly there hasn’t been much talk of ‘attracting’ anything to New Brunswick during this election campaign. Stumping from town to town around the province promoting a platform of attracting people, entrepreneurs, investors and big national or international businesses would be a sure fire way to lose votes.

There is a longstanding unease in this province about anything “from away” and many politicians find ways to exploit unease for political gain.

But whether we like it or not we now live in an open society where people and investment flow freely. New Brunswick is already runs a huge trade deficit in people, investment as well as trade in goods and services.

We need to get over our fear of “from away” and be open to attracting businesses, investment and people and not worried these inflows will erode the uncomplicated lifestyle we value here in New Brunswick.

David Campbell
davidwcampbell.com
An economic development consultant based in Moncton

]]>http://davidwcampbell.com/2014/09/selling-the-uncomplicated-life/feed/0Enlisting the young in the fight against lethargy and stagnationhttp://davidwcampbell.com/2014/09/enlisting-the-young-in-the-fight-against-lethargy-and-stagnation/
http://davidwcampbell.com/2014/09/enlisting-the-young-in-the-fight-against-lethargy-and-stagnation/#commentsSun, 21 Sep 2014 15:04:56 +0000http://davidwcampbell.com/?p=6448Continue reading →]]>From Dan Martell’s CrunchtimeNB initiative to Lisa Hrabluk’s Wicked Ideas (as in, she tells me, wicked smart), there has been a lot of focus on getting out the youth vote in this election. I love it. The more NBers engaged in the political process the better.

But I would like to see it go one step further. I’d like to see young NBers get engaged and push politicians towards smarter economic policies.

It’s easy to get young people worked up over social, environmental and rights issues but economic issues not so much. In fact, I would suggest in general younger people are even more suspicious of markets and profit and wealth than the older generation (hunch, not data driven).

That suspicion is not a bad thing. Suspicion is one of the ways we can restrain some of the excesses of the capitalistic system.

But, in the specific case of New Brunswick, we need people to think about how economies grow and reward the political class for moving in that direction.

For example, young people are smart. They can connect the dots.

They know that more than ever the products and services they consume are produced elsewhere – think Facebook, Twitter, Amazon, Samsung, Apple, etc. so it should not be a leap to convince them New Brunswick has to be more focused on integrating into this global economy. For New Brunswick to be successful we need firms that are selling into the global market.

If a young person is saving for the future (RRSPs, pension, etc.) it wouldn’t take long for them to realize that virtually all of their savings have been invested anywhere but New Brunswick. Young public servants can look at where their pension is being invested if they want the most vivid example of this.

The logic that we need to be attracting our share of investment from outside, then, shouldn’t be that hard to figure out. This investment can come by way of investment into existing NB firms or from firms that are based outside NB investing here.

Young people can understand the basic demographic reality facing this province. If we don’t dramatically increase the younger population we will destabilize the ability of government to generate enough taxes to pay for public services and infrastructure.

Young people are more jazzed up by ‘localism’ and so they should be but that is not inconsistent with a globalized NB. In fact, the two are highly symbiotic. If we have a strong core traded economy (export-based to offset the massive imports), that allows us more wiggle room to pursue a local food strategy, local arts and culture development, etc. The stuff that binds us together as local communities requires us to get the global issues (the traded economy part) right.

So, do I expect young people to demonstrate outside the legislature with placards reading “We want more multinationals to invest here now!”? No. That would be too far even by my standards (although the campaign to attract Walmart to the Miramichi was an interesting aberration all those years ago).

But I would like them to push their politicians on immigration, on urban development, and, yes, on natural resources development. Again, it is somewhat of a cliché that young=anti-natural resources development. But they see their peers leaving to work in Alberta and Saskatchewan. They read the stories. They see the Facebook posts. The dots are there to connect.

In the end it is a matter of basic ‘physics’ that older NBers are starting to think about retirement and the great blue yonder. It is the young ‘uns – with their entire lives still ahead of them – that have the most to lose if we don’t get this right.

]]>http://davidwcampbell.com/2014/09/enlisting-the-young-in-the-fight-against-lethargy-and-stagnation/feed/0I didn’t want to write this, but I did (Warning: Fracking content ahead)http://davidwcampbell.com/2014/09/i-didnt-want-to-write-this-but-i-did-warning-fracking-content-ahead/
http://davidwcampbell.com/2014/09/i-didnt-want-to-write-this-but-i-did-warning-fracking-content-ahead/#commentsFri, 19 Sep 2014 21:32:31 +0000http://davidwcampbell.com/?p=6446Continue reading →]]>I read the article quoting the most popular Premier in Canada, Brad Wall, and his position on shale gas – or more specifically hydraulic fracturing as Saskatchewan is mostly using the technology to frack for oil in the Bakken – with interest. You will probably need to have a password to the TJ to read it but it is worth it – particularly how Gallant and Cardy responded to his comments.

Cardy said he didn’t know enough about Saskatchewan’s wells to comment on whether they were safe. “I don’t know anything about the industry in Saskatchewan, all I know about is the industry in this province,” he said.

Gallant was asked on Friday if he would look to other provinces such as Saskatchewan in deciding whether to lift the proposed Liberal moratorium on hydraulic fracturing. “Sure,” he said. “But I would have to add that there would be a lot more stock in the studies and reports that we need to get the information that we think we are lacking when it comes to the risks of our water, environment, and our health.

This shows you just how toxic and polarizing shale gas is for these two politicians. They are forced to use Rube Goldbergian linguistic contortions every time this issue is raised.

Imagine Cardy admitting he doesn’t know enough about Saskatchewan. He is easily the closest thing to a policy wonk we have in NB politics. If there was a poverty reduction scheme or income equality program in Saskatchewan he would have it memorized chapter and verse. When it comes to an industry that could be a multibillion a year economic driver and bring several thousand jobs to the province, he doesn’t want to even pick up the literature to read about Saskatchewan – another Canadian province.

But I sympathize with him – I really do. He developed probably the most elaborate and difficult policy framework for shale gas that could possibly be imagined other that outright banning the industry and still had a candidate publicly chastise him for it. He doesn’t seem to realize that for many – many is his own party – it has nothing to do with fracking. It’s about the oil and gas industry itself. There are many New Brunswickers who are completely against the industry even if it means we have to import our gas from far and wide.

So there is no heavily parsed, sliced and diced, Rube Goldbergian position on shale gas that would satisfy them – not NDP, not Liberal and I suspect a good slice of Tory voters as well have no interest in learning from Saskatchewan or anywhere else.

I think we should just throw away this faux debate about fracking – it must be making journalists queasy – and get on to the real debate about whether or not we want NB to have an oil and gas exploration and production sector.

Presumably what he would like to say but can’t is that this issue could end up putting a whopping fracture in Confederation itself.

Eventually the three western Canadian provinces will realize they are depleting their oil and gas reserves using the techniques that are being banned in Quebec, Nova Scotia and if the Libs get elected in New Brunswick, here too. A portion of the government revenue generated by that depletion is finding its way down to QC, NS and NB in the form of Equalization.

Should western Canada’s oil and gas revenue be used to pay for Equalization in Quebec and the Maritimes if those provinces refuse to develop their own oil and gas industry using the exact same techniques?

As a kid my brothers and sister used to pick on my for hoarding. We would all get a candy bar and they would gobble theirs down and I would save mine for later. At some point I would whip mine out and slowly savour it while the others watched with envy.

BC, AB and SK could make a similar case here.

Now there are constitutional issues that would come into play here but if the public in a part of Canada with the fastest growing population and the economic might decided to think about the fracking bans in Quebec and the Maritimes we might not like the outcome.

]]>http://davidwcampbell.com/2014/09/are-we-fracking-confederation/feed/0Population churn: It’s the net number that countshttp://davidwcampbell.com/2014/09/population-churn-its-the-net-number-that-counts/
http://davidwcampbell.com/2014/09/population-churn-its-the-net-number-that-counts/#commentsWed, 03 Sep 2014 10:00:06 +0000http://davidwcampbell.com/?p=6438Continue reading →]]>Political campaigns are filled with snappy one liners meant to stick in the voters mind. In New Brunswick there tends to be a lot in the spirit of “keep our young people home”. That tugs at the heart strings – “our best and brightest young people have to move out west because of our politicians”. It makes you want to take a cudgel to your polling station.

But it is worth reminding you that we are really interested in the ‘net’ number. Young people will leave NB in the thousands each year. They always have. They always will. They go away to school (I just dropped my eldest daughter off at York U this past weekend, sigh). They want to see the world. And, yes, some will go to make the big bucks.

We need New Brunswick to be a place that is creating meaningful career opportunities for young people. That gives young NBers choices (stay or go) but ultimately where the population comes from to fill those jobs will be a combination of locals, interprovincial migrants and immigrants.

Look at the Toronto CMA. Over the past decade it has lost more people on a net basis through intraprovincial and interprovincial migration than it has attracted. More people moved to Moncton from Toronto than vice versa since 2006. But Toronto more than makes up with massive immigration. In an average year, Toronto attracts more immigrants in one year than New Brunswick attracts in 75 years. BTW, a chunk of those immigrants to Toronto also end up migrating out and some of them end up in New Brunswick – which removes Jason Kenny from the equation altogether (hint, hint).

Bottom line? For many young NBers the best thing for them to do is leave (and hopefully many will come back). Living in another city or country opens their eyes to possibilities. It makes them more tolerant. It strengthens ambition. Many – if not most – of the interesting people I meet in this province either moved here from away or were born here but moved away and then came back.

It doesn’t make much for a campaign zinger but I propose the politicians say “We need to focus on the net migration pattern” or how about “let my people go and bring back skills and worldliness we really need”.

]]>http://davidwcampbell.com/2014/09/population-churn-its-the-net-number-that-counts/feed/0Video games and economic developmenthttp://davidwcampbell.com/2014/08/video-games-and-economic-development/
http://davidwcampbell.com/2014/08/video-games-and-economic-development/#commentsSun, 31 Aug 2014 12:28:10 +0000http://davidwcampbell.com/?p=6436Continue reading →]]>There is an excellent article on the front page of the NY Times on the rise of these multi-player video games as a spectator sport. From the article:

The video game Dota 2, like so many across the Internet, transports teams of players from their bedrooms to a verdant virtual world where they smite each other through keyboard and mouse clicks. Except on this sunny day in July, every attack and counterattack by a five-person team set off an eruption of cheers — from the more than 11,000 spectators crammed into this city’s basketball arena.

The contestants were gunning for a big piece of the $11 million in total prize money, the most ever at a games tournament. And the game’s developer, the Valve Corporation, moved another step closer to securing gaming’s legitimacy as a major-league spectator sport.

Theoretically a place like Moncton could be a centre for this type of entertainment pulling folks from across the Maritimes. But it would be rare for New Brunswick to get out front of a trend like this. It is more likely if this takes root it will start in Halifax and may eventually work its way up to New Brunswick.